The Nordic central banks signed a swap facility with the Icelandic central bank on Friday to give strong support to the island's beleaguered currency, according to a joint statement from the Nordic central banks.

The facilities are a precautionary measure made to provide the Central Bank of Iceland with access to euro if needed, the central banks of Sweden, Norway and Denmark said in the statement, adding that each central bank would offer up to 500 million euros (about 774 million U.S. dollars).

Iceland's economy has sputtered and in April the central bank raised its interest rate to 15.5 per cent in an attempt to tackle soaring inflation. Its currency has slumped and made imported goods more costly.

"In times of uncertainty and turmoil the central banks have a responsibility to cooperate to attain their overall objectives," Swedish central bank governor Stefan Ingves said in a statement.

In Oslo, Norwegian central bank governor Svein Gjedrem said the deal was aimed at helping "Icelandic authorities in their efforts to stabilize economic conditions in Iceland."