Krona Collapse Causes McDonald’s Corp (NYSE: MCD) Store Closure

According to Bloomberg, when Iceland’s currency Krona collapsed, McDonald Corp (NYSE: MCD) decided to close its fast food chain in that country. While its competitors use domestic meat, lettuce and other items, it has to import nearly all of its ingredients. So the costs doubled due to currency fluctuations.

Bloomberg says that against the Euro, Iceland’s currency tumbled down by more than 80%. Even the capital restrictions could not avert an 8.1% decline. With that, of the 26 emerging market currencies tracked by Bloomberg, Krona came second from the last. Due to this currency tumble a big Mac in Iceland may cost 780 kronur. That means Icelanders may have to pay 20% more that what it costs today.