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Iceland to free up currency movements

[REYKJAVIK] Iceland announced on Tuesday that it plans to lift nearly all the restrictions on currency movements imposed on its citizens in the 2008 global financial crisis.

The country, which introduced capital controls at the time to prevent a capital flight and shore up the national currency, the krona, said it can now begin progressively lifting restrictions.

The finance ministry unveiled draft legislation which will allow Icelanders, for example, to buy property overseas and expand "significantly" their right to purchase foreign currency in cash.

"Important steps are being taken to lift the capital controls in full," said the ministry in a statement setting out details of the draft law.

"With the measures provided for in the bill, the capital controls should not place substantial restrictions on most individuals, and by the turn of the year, only a very few individuals should be affected," it added.

Drafted with the approval of the International Monetary Fund (IMF), the bill is due to be presented to parliament on Wednesday, and is expected to be approved without difficulty.

The progressive easing of restrictions imposed by the 2008 global crisis has been one of the main successes of the centre-right government in power since 2013.

Prime Minister Sigurdur Ingi Johannsson aims to complete the work in time for early legislative elections scheduled for October 29.

However, he remains deeply unpopular due to his perceived closeness to business and the fallout from the so-called Panama Papers, which revealed that hundreds of Icelanders held interests in tax havens.