STOCKHOLM May 5 Iceland's economy is recovering
in line with forecasts but a loosening of capital controls could
need to be slowed if external financing proved difficult, the
International Monetary Fund's mission chief said on Thursday.
Mission Chief Julie Kozack said that conditions for
gradually removing the capital controls, introduced during
Iceland's financial meltdown to shelter the battered currency,
were largely in place, but noted delays might still occur.
"To the extent that the external financing environment
proves difficult, capital account liberalization would
need to be slowed," she said in a statement, adding Iceland and
the IMF had agreed on completion of the fifth review of its $2.1
billion aid programme.
Iceland's top three banks collapsed in late 2008 as the
global credit crisis struck, triggering a deep recession, and
the country was forced to seek an aid package from the IMF and
its Nordic neighbours.
The IMF's aid fifth review had been delayed due to a
nationwide referendum in which Icelandic voters earlier this
month rejected a revised $5 billion repayment plan for Britain
and the Netherlands for money lost in Landsbanki Icesave
accounts during the crisis.