Bank of Iceland

August 21, 2014

The Bank of Iceland made a scheduled interest rate announcement on Wednesday.  Iceland’s seven-day central bank interest rate was kept at 6.0%, its level since November 2012.  A released statement observes, “The inflation outlook has improved somewhat since May, and it now appears that inflation will remain close to target during the forecast horizon. A positive output gap is forecast to develop later than was assumed in the last forecast and will be less pronounced.”  Eventually, “robust growth in domestic demand in the near term and growing tension in the labor market could generate increased inflationary pressures, however, and necessitate an increase in the Bank’s nominal interest rates.”

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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