Reykjavík serves as the capital and largest city of Iceland, situated on the southern shore of Faxaflói bay in the southwest region. It holds the distinction of being the world's northernmost capital of a sovereign state, located at a latitude of 64°08′ N. The city acts as the central hub for Iceland's cultural, economic, and governmental activities, anchoring the surrounding Capital Region which constitutes approximately 64% of the nation's total population.