Icelandic crown, money market trade dries up - dealers

LONDON, Oct 10 (Reuters) - Icelandic financial markets ground to a halt on Friday as traders reported hardly any trades in the crown currency and money markets, while the local stock exchange remains shut until next week. There have been no trades recorded in the Icelandic crown versus the euro on the Reuters matching dealing system since Oct 8, and there are no price quotations in Icelandic one-month and three-month deposit rates. "The interbank market is not functioning, the money market is frozen," said a trader at a bank in Reykjavik. "We are keeping a couple of deals going for the local firms, we are hoping that the central bank will do something about this today, or at least by Monday." Icelandic banks are making euro/crown price quotations on the Reuters conversational dealing system, but the latest price of 150.19 differs markedly from the most recent price on the matching system of 340. The matching system was showing a bid price for the euro/crown rate of 135 and an offer price of 450 on Friday. Traders outside Iceland said they were reluctant to trade the crown as the currency is not covered by CLS, a global system which ensures the settlement of foreign exchange transactions. Iceland has seized control of its three biggest banks and is beginning negotiations to secure a 4 billion euro ($5.49 billion) loan from Russia next week in the face of a financial meltdown. International Monetary Fund staff have been in Iceland on a fact-finding mission. Prime Minister Geir Haarde said on Thursday the country had not decided whether to seek help from the Washington-based fund. (Reporting by Carolyn Cohn; Editing by Andy Bruce) ($1=.7287 Euro) Keywords: ICELAND TRADE [e-mail] cmr COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved.

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