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
Economic history of Iceland the first year – 2009 – allowing fiscal multipliers to counteract the output contraction that was underway. Iceland also was not asked to downsize its Scandinavian-type welfare system." Iceland is the only country in the world to have a population under two million yet still have a floating exchange rate and an independent monetary policy. 2008 Financial Crisis and Recovery: Economic history of Iceland The economy history of Iceland covers the development of its economy from the Settlement of Iceland in the late 9th century until the present. According to a 2011 review study by economic historian Guðmundur Jónsson, "Economic