Bank Official: Iceland Can Survive If IMF Funds Delayed

Thursday, 04 Mar 2010 07:47 AM

 

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Iceland can get by without more cash from the International Monetary Fund until it needs to refinance debt in 2011, although any big delay in foreign aid flows will hit its economy, a central banker said on Thursday.

Sedlabanki Deputy Governor Arnor Sighvatsson told Reuters that foreign investors should remain calm if Icelanders reject the "Icesave" bill in Saturday's referendum, likely freezing the foreign aid needed to resuscitate Iceland's collapsed economy.

"There is no specific deadline at which further delays will have serious repercussions," he said in an interview. "(But) if this would drag into 2011, we would have some refinancing issues."

Sighvatsson also said uncertainty over the continued availability of IMF funds meant that Iceland could not relax capital controls needed to prevent a possible run on the crown currency.

© 2014 Thomson/Reuters. All rights reserved.

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