The monetary unit in Iceland is króna (plural: krónur). The international abbreviation is ISK and the domestic abbreviation is kr. Million units are expressed as m.kr. and billion units as b.kr (ma.kr in Icelandic).
The Central bank pursues an inflation target of 2.5% with monetary policy decisions on preannounced dates. The Central bank can intervene directly in the FX market, affecting the exchange rate in order to bring inflation to target.
The ISK Interbank Market (REIBOR) has operated in its current form since 1998. Market participants quote borrowing and lending rates for standard maturities up-to 12 months.
The FX Swap Market was established in 2001. Swaps are made in ISK and USD/EUR and market participants are required to quote firm bid and ask prices for maturities of 1W, 2W, 1M, 2M, 3M, 6M, 9M and 12M.
Restrictions on FX market:
Following the financial crises late in 2008 the Central Bank of Iceland issued new Rules on Foreign Exchange.