Iceland defrosts the capital controls it put in place because of the 2008 financial crisis

Hayley Kirton
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The capital controls were triggered by the collapse of the country's major lenders (Source: Getty)

The Icelandic government announced today it will be completely lifting on Tuesday the capital controls it put in place against country's individuals, firms, and pension funds to keep it propped during the fallout of the financial crisis.

The government and Central Bank of Iceland have been over the last year whittling down the controls, which were put in place in 2008 after three of Iceland's largest banks collapsed and include restrictions on money flowing in and out of the country.

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"Iceland's careful, measured approach to lift capital controls was developed and approved with domestic and international support," said Benedikt Johannesson, Iceland's minister of finance and economic affairs. "As a result of this structured plan, our diversified economy is larger than ever before and expected to continue to grow at a robust pace this year.

"Our sustainable fisheries, tourism, tech startups and renewable energy sectors have grown rapidly, providing a strong backbone to our economy.

"This move is the critical first step in the new government's strategy for the country's financial future, and we can now look ahead with a healthier, stronger and more diversified economy."

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The Central Bank of Iceland also revealed it had snapped up roughly 90bn krona (£687m) from offshore holders of the currency, in a bid to further safeguard the country's economy. The currency plummeted in value during the financial crisis.

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