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 was no resistance, but the government protested against what it called a "flagrant violation" of Icelandic neutrality, though Prime Minister Hermann Jónasson called on Icelanders to treat the British troops with politeness, as if they were guests. They behaved accordingly, and there were no mishaps. The occupation of Iceland lasted throughout the war. At the peak, the British had 25,000 troops stationed in Iceland, all but eliminating unemployment in the Reykjavík area and other strategically important places. In July 1941, responsibility for Iceland's occupation and defence passed to the United States under a U.S.-Icelandic agreement which included a provision that