Fortunately, though, once the next IMF review is complete, there will be no doubt about it. The foreign exchange reserves now total 1.7 billion euros, apart from shortterm obligations. In the next few months, they will expand by 453 million euros due to transactions related to Avens, 255 million euros from the sale of FIH bank in Denmark, and 620 million euros following the third IMF review. The reserves will then exceed 3 billion euros. In comparison, the next two years’ interest and instalments on two Treasury bond series total 1.5 billion euros, 400 million of which have already been bought back at a discount. The following two charts show clearly how much foreign liquidity will improve. They show that the foreign exchange reserves will grow as large as 4 billion euros if Iceland draws the full amount of the loan facilities available through the IMF programme, and that they will cover the Treasury’s instalments and interest payments through 2015. Of course, access to foreign credit markets will open up long before that time, and a part of the debt will be refinanced in the market. 4  BIS Review 130/2010  I know that all of you who are assembled here today are very interested in how the exchange rate will develop once the Icelandic economy rights itself, hopefully within a few quarters. The chart below shows the real exchange rate of the króna, which is currently about 20% below its historical average but dropped as far as 33% below that average during the crisis.
News conference  Berne, 15 December 2016 Andréa M. Maechler  Introductory remarks by Andréa M. Maechler  I will begin by reviewing the situation on the financial markets, before going on to talk about the impact of negative interest on the money and capital markets. I will finish my presentation with a few comments on the progress that has been made in reforming benchmark interest rates. Situation on the financial markets  Since the last news conference in June, movements on the financial markets have been heavily influenced by two political events: the unexpected outcome of the Brexit vote in June and the US presidential election in November. Both events generated short-term uncertainty among investors. Nevertheless, positive risk sentiment prevailed overall. Leading equity indices in the US, Japan and Europe have recorded price gains since mid-year (cf. chart 1). In the US, all key indices hit new record highs at the beginning of December. In Switzerland, the SMI, however, lagged behind the general trend: it is currently virtually unchanged from its mid-year level. The reason for this is the index’s strong weighting in defensive equities, from the healthcare and consumer goods sector for example. These securities, which tend to benefit less from increasing risk appetite among investors, came under selling pressure as a result of rising interest rates. On bond markets, high-quality government bond yields have climbed since mid-year (cf. chart 2a). Firstly, economic data bolstered investor confidence in a global economic recovery.