Central Bank Rate Cut in Iceland

June 26, 2019

The Central Bank of Iceland’s 7-day term rate has been cut 25 basis points to 3.75% following a 50-basis point reduction at the prior monetary policy review last month. These moves represent a trend reversal from a 25-basis point increase last November.  In a released statement explaining the decision, officials anticipate a contraction of domestic demand and observed weaker-than-assumed tourism. Inflation is projected to ease, and measures of expected inflation have moved lower recently. There’s scope to relax monetary policy further if needed.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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