Page last updated at 22:02 GMT, Tuesday, 14 October 2008 23:02 UK

Iceland 'working day and night'

Icelandic stock exchange
The stock exchange had been closed since last Thursday

Iceland's government is working "day and night" to solve the country's financial crisis, Prime Minister Geir Haarde has told the BBC.

He said its priority was to get Iceland's banking system working properly again following last week's near-collapse.

The central bank has turned to its northern European neighbours for help in raising foreign currency.

Talks with Russia and the the IMF over possible loans continue.

"We need to make sure we have a functioning banking system - this is what we are working on day and night, " Mr Haarde told the BBC's Clive Myrie.

On the International Monetary Fund, which has sent a mission to evaluate the situation in Iceland, Mr Haarde said: "We have not decided whether or not we will apply for a loan, and they have not decided what conditions they will set if we do."

Tuesday saw Iceland's central bank use a swap facility to receive 200m euros ($273m; 156m) each from the central banks of Norway and Denmark.

The Nordic country's stock exchange closed down 5.8% when trading resumed on Tuesday, five days after it was suspended.

UK savers

Iceland's biggest banks were nationalised last week, and the central bank has imposed tight restrictions on the use of foreign currency at home and capped Icelanders' credit card use overseas.

People can now only purchase foreign currency in Iceland if they have a valid overseas travel ticket.

Firms have to prove to the central bank that they want the money for essential foreign purchases such as food, fuel and medicine.

The difficulties in the Icelandic banking sector have also had a major impact on other European countries, as Iceland's attractive interest rates had attracted a great many customers from overseas.

Local councils and other public bodies in the UK have about 1bn invested in Iceland, and hundreds of thousands of British savers have also been affected.

The UK Treasury is continuing to work with its Icelandic counterpart to ensure all its depositors get their money back as swiftly as possible. It has already said all British savers' money is protected.




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