Króna in chaos during Iceland's meltdown

Sedlabanki pegged the króna to a trade-weighted basket of currencies on October 7 to avoid the collapse of the currency, but it U-turned the next day in response to criticism. The króna was fixed at EUR/ISK 131, based on a basket weighting the dollar, euro and sterling at 76% with the remainder split between the Nordic currencies (excluding Finland), yen, Swiss franc and Canadian dollar.

Spot, fowards and options trading in the currency came to a standstill last Wednesday, as the country's

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