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Iceland fact of the day
Commerzbank AG, Germany's second-biggest bank, said yesterday there is ``no active market'' in the krona. The last quoted price was 340 per euro, compared with 122 a month ago.
Here is the link. I'm starting to wonder if I should visit for a weekend; it's one of my favorite countries. Will they let me bring my own food?
Posted by Tyler Cowen on October 14, 2008 at 12:52 PM in Data Source | Permalink
Comments
No active market at Commerzbank, maybe. But according to Bloomberg the Icelandic banks are doing brisk FX business between themselves. Current exchange rate is only about 150.
Posted by: mobile at Oct 14, 2008 1:05:25 PM
Tyler, I'm sure that you must've had a teacher who taught you that if you're going to bring food, you have to bring enough for everyone... in Iceland...
Posted by: Angus Hendrick at Oct 14, 2008 1:11:07 PM
I was there a few weeks ago and Customs didn't stop me for anything, so I and my week's worth of hiking rations got in without any trouble or questions fees. Might be worth another visit.
Posted by: Mark at Oct 14, 2008 1:17:08 PM
There *is* a market in the Krona, but no one is silly enough to engage it. Banks will happily sell krona at the old rate and buy at the new. Credit cards are converting spending to hard currency on your bill at the old rate (boo!).
It's not easy to take advantage of these opportunities, there are some good deals out there, but the holy grail of opportunities is a bit difficult to come by.
I discuss the problem of trying to book round the world airline tickets ex-KEF here:
http://boardingarea.com/blogs/viewfromthewing/2008/10/14/the-kronas-collapse-for-fun-and-profit/
Posted by: Gary Leff at Oct 14, 2008 2:47:33 PM
You should! It's crazy-cheap right now, and they apparently need your tourism dollars (I mean, even denominated in dollars). And...Iceland! Still gorgeous.
Posted by: Andromeda at Oct 14, 2008 4:04:05 PM
It's worth it to check out the country these days. Things are relatively cheap over here these days and a lot of visitors have been shopping wildly over here and even our biggest airline is experiencing a good season and have decided to do a good offer for flying over to here.
http://www.icelandair.com/home/book-a-flight/special-offers/detail/store65/item331618/
Posted by: Bjarni at Oct 14, 2008 4:07:37 PM
I think you should take a LOT of food and sell it for hard currency only!
Posted by: Michael Tinkler at Oct 14, 2008 6:23:05 PM
as a trader who has actively covered the krona for over five years now it is both fascinating and tragic what happened to the country and their currency. as a general free-marketer, after work on a college thesis related to the asian financial crisis the manner in which small leveraged countries accept hot money inflows need to be monitored by some international body to protect their citizens as evidenced by this. right now we are coordinating payments for corporations needing access through connecting them to the onshore banks which are trading closer to the 140 rate but the market as it once was known has completely shut down. i hate to admit it though, i am contemplating heading over there as everyone told me it was beautiful but more expensive than nyc as of 2004.
Posted by: Ranjan Roy at Oct 14, 2008 7:29:46 PM
I've always wanted to visit Iceland but haven't been able to afford it yet.
Just wondering - are its financial difficulties likely to make Iceland more
affordable as a vacation spot or less so?
Posted by: RZ at Oct 14, 2008 7:48:48 PM
If you guys want to come, come soon. The days are getting colder and the nights are getting longer. This place shines under blue skies in the summer, now we're at the beginning of six months of howling, bleak nothingness. If you come and need kronur, well I need dollars and Glitnir refuses to sell any to me. So maybe we've got a market. Good rate! Big bargain! I'll even throw in a complementary Northern Lights Mystery Tour at Þingveillir, and teach you how to pronounce the goofy Icelandic letters: ð, þ, æ.
Posted by: bob at Oct 15, 2008 10:42:38 AM
We I think you should not worry, we crave your dollars :)
There will not be shortage of food here any time soon. At the worst it will be the Icelandic fish. There is from 1-3 tons per person per year of fish caught in Iceland. The agriculture is great, enough of electricity to grow vegetables all around the year.
The British used Terror low to freeze assets in GB, which is incredible. This is the main trouble now as currency for export is frozen in UK and not delivered to Iceland.
But you really should not worry about a thing, for normal Icelanders are not being affected in there day to day life.
Posted by: Thomasha at Oct 18, 2008 6:53:06 PM
