Iceland and the International Monetary Fund set at positive 2-3 percent by 2010. Additionally Iceland determined that it would not support the losses of its pension funds and social service programmes in order not to take up additional obligations. One of the primary objectives of the Icelandic government in seeking an IMF programme was to stabilize the ISK and to set a path for its gradual appreciation. To stabilize short term pressures on the ISK the Central Bank of Iceland raised interest rates to 18% and prepared to back the krona with its foreign reserves, specifically for which Iceland asked for an IMF programme . The
History of Iceland stop to that when the war began in September. Iceland demanded Britain allow it to trade with Germany, to no avail. The occupation of Denmark by Nazi Germany began on 9 April 1940, severing communications between Iceland and Denmark. As a result, on 10 April, the Parliament of Iceland took temporary control of foreign affairs (setting up what would be the forerunner of the Ministry for Foreign Affairs) and the Coast Guard. Parliament also elected a provisional governor, Sveinn Björnsson, who later became the Republic's first president. Iceland became "de facto" fully sovereign with these actions. At the time, Icelanders