Objectives and roles

The Central Bank's main objective is to promote price stability. With the approval of the Prime Minister, the Central Bank specifies a numerical inflation target. Furthermore, the Central Bank undertakes standard central banking tasks such as maintaining external reserves and promoting an efficient and safe financial system, including payment systems domestically and with foreign countries. The Central Bank of Iceland has the sole right to issue bank notes and to mint and issue coins or other currency which may circulate in place of banks notes or lawful coins.

The Central Bank of Iceland accepts deposits from deposit institutions, which consist of commercial banks, savings banks, branches of foreign deposit institutions and other institutions and companies authorised by law to accept deposits from the public for safekeeping and investment.

Main roles of the Central Bank of Iceland:

• To promote price stability
• To promote financial stability
• To issue notes and coin
• To handle exchange rate matters
• To act as banker to the Treasury and credit institutions
• To maintain and invest Iceland's foreign reserve
• To handle borrowing by the Republic of Iceland
• To compile economic and monetary data, provide opinions and advise the Government on all foreign exchange and monetary issues