Iceland floats krona, adopts 2.5% inflation target

ICELAND - On Mar 27, 2001, Iceland decided to float the krona and adopt a 2.5% inflation target. The krona has come under much pressure in recent weeks most recently on Mar 26, forcing the central bank to intervene in the markets to maintain the currency within its fluctuation bands.

There was much speculation that the Icelandic central bank would abandon its trading band during its board meeting on Mar 27. The changes have been "under consideration for some time", the central bank said.

But this

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