September 29, 2008 / 9:52 AM / 11 years ago

Icelandic crown falls to new lows after Glitnir takeover news

LONDON, Sept 29 (Reuters) - Iceland’s crown currency plunged over 3 percent to a record low against the euro on Monday after its government announced that it was taking control of the country’s number three bank Glitnir GLB.IC. The crown fell over 3 percent versus the euro EURISK= to a historic low of 143.27 before recovering to trade 1.55 percent lower to 139.67 at 0940 GMT.

The dollar ISK= was 3 percent higher at 97.51 crowns, trimming an earlier 5 percent gain.

“The Icelandic banks have had a funding problem for some time, but this was a very drastic move which I don’t think many people expected,” SEB FX strategist Carl Hammer said.

Reporting by Sebastian Tong; editing by Veronica Brown

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