The Icelandic government announced yesterday that it had reached an
agreement with the International Monetary Fund (IMF) on a comprehensive economic
stabilization program including a US$2 billion loan from the fund.
"The program requires approval from the management of the IMF. Iceland would
be able to draw US$830 million immediately after the IMF board approves the
program," the government said in a press release, adding that they are confident
that the IMF's management will support the program and submit it for approval by
the IMF's executive board as soon as possible.
"This program will enable us to secure funding and gain access to the
necessary technical expertise required to stabilize the Icelandic krona and to
provide support for the development of a healthier financial system," said
Icelandic Prime Minister Geir H.Haarde.
"As a result, Iceland will commit to a sustainable long-term economic policy,
and a plan for the recovery of the Icelandic economy. A thorough review of the
Icelandic banking regulatory framework will also form part of this program," he
added.
Haarde pointed out that with cooperation with the IMF Iceland is now in a
much better position to establish a sound economic and
financial base for the country. "We now have grounds for a more optimistic
view of the future," he said.
Iceland's stock market crashed earlier this month and the government
nationalized three of the country's biggest banks.
