ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The IMF provided funds in 2008 to help Iceland support its banks and stabilise its currency.
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Yes, I understand this from the notes
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No, I don’t understand this from the notes
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No, I don’t understand this, as I have not read the notes
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None of the above
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Explanation:
Detailed explanation-1: -The purpose of the loan was to help revive the economy to allow the Icelandic krona to gain value. Once the IMF executive board approves, Iceland could immediately take out $833 million of the loan.
Detailed explanation-2: -The national currency fell sharply in value, foreign currency transactions were virtually suspended for weeks, and the market capitalisation of the Icelandic stock exchange fell by more than 90%.
Detailed explanation-3: -An agreement with the IMF was reached on 24 October 2008 (IMF 2008). Against the assurance of following the policies of the programme, the IMF and friendly nations lent Iceland $5 billion – 40% of GDP – to serve its external financing needs over the next three years.
There is 1 question to complete.