[ISL] "Iceland’s Fishing Industry Roots for Rate Cut Amid Krona Gains"

[rfmcdonald]

Omar Valdimarsson's Bloomberg article on the dynamics of Iceland's fisheries is interesting.

While the world around it frets over ultra-low interest rates, Iceland’s fish export industry is rooting for another rate cut to maintain market share amid a strengthening krona.

"The appreciation of the krona is a large factor in the operations of fishing companies and can impact their bottom line," Heidrun Lind Marteinsdottir, managing director of Fisheries Iceland, an industry lobby, said in a telephone interview. "It is a risk that needs to be taken under special consideration and, if need be, acted upon."

Although fisheries is no longer the country’s main industry - tourism and aluminum smelting are now bigger revenue generators -- it still accounted for more than a fifth of all 2015 exports. But after enjoying a good run in the post financial crisis years, it is beginning to feel the squeeze from an appreciating krona as the economy gets back on track.

Iceland’s currency has gained more than 11 percent against both the dollar and the euro over the past 12 months and is expected to continue to rise by as much as 5 percent through 2017, according to Islandsbanki, the second largest lender on the island.