RTTNews - The Iceland central bank on Wednesday said the capital controls will be lifted in stages and is set to start removing restrictions before November 1 provided certain preconditions are complied with.

In the first stage, controls on all foreign exchange capital inflows will be removed in a relatively short time frame, the Central Bank of Iceland said. The first stage is expected to have a positive or limited effect on the reserves.

The stage 2 will begin with the gradual liberalization of outflows from specified accounts with the longest maturities, asset classes and transactions. The use of Icelandic krónur for international transactions will remain controlled until the final stage of liberalization.

To deal with banking crisis, the central bank had imposed capital control measures at the end of 2008. The central bank said, A significant reduction in the perceived risk of investments in Icelandic assets is a precondition for removing the capital controls.

On July 31, the Icelandic Government had approved the capital account liberalization strategy prepared by the Central Bank of Iceland.

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