A surge in lending to Iceland’s construction sector has been partly explained by the reclassification of loans previously assigned to other industries, according to newly released minutes from the Monetary Policy Committee of the Central Bank of Iceland. The change contributes to a recent rise in business lending. The report was first covered by mbl.is.
The Central Bank of Iceland noted in its minutes that lending to the construction sector accounts for the largest part of the recent increase in lending to firms overall. According to the minutes, loans to the construction industry have grown by 8.7%.
The minutes also point to additional developments in Iceland’s financial sector. A large increase in foreign-currency inflows to Iceland is cited as the likely main reason for the sharp strengthening of the Icelandic króna in recent months, as reported by Vísir. These inflows have been up to three times larger than they were earlier this year and may be linked to construction of foreign-owned data centres or settlement of other foreign transactions.
Sources
Links: fundargerð
- mbl.is (first reported) in Icelandic
- Vísir in Icelandic
