Bank of Iceland

Iceland’s Central Bank Tightens and Suggest More Restraint May Follow

November 7, 2018

A 25 basis point increase of the Bank of Iceland’s 7-day term rate to 4.50% was the first tightening since November 2015. In between, the benchmark had been reduced by 50 basis points in August 2016 and 25 basis point each in May 2017, June 2017, and October 2017. Today’s rate reversal comes in response […] More

Dollar Down Broadly after Mixed U.S. Election Result

November 7, 2018

The dollar traded down overnight by 1.7% against the kiwi, 1.0% versus the Australian dollar, 0.7% relative to the euro and Swiss franc, 0.5% vis-a-vis the peso and sterling, 0.4% against the loonie, 0.3% versus the yen and 0.1% against the yuan. Share prices fell in Asia but have risen in Europe. Market losses totaled […] More

Bank of Iceland’s August Policy Review

August 23, 2017

The 7-day deposit rate, which had been cut by 50 basis point sin August 2016 and by 25 bps each in May and June of this year, was left at 4.5% after the latest meeting of the monetary policy committee. A released statement revealed that projected GDP growth in 2017 was revised marginally lower but […] More

Trump Fuels Public Angst Again

August 23, 2017

In vintage style, the U.S. president’s comments at a political rally in Phoenix was full of threats and accusations on a range of topics: a possible government shutdown if Congress doesn’t fund his “wall” proposal; blaming a few Republicans for the vote against repealing Obamacare; accusing the media for distorting his response to Charlottesville and […] More

Bank of Iceland

June 1, 2016

Icelandic monetary policy has been in a tightening cycle since an initial increase in the seven-day collateralized lending rate of 50 basis points in June 2015.  That move was followed by two 25-basis point hikes in August and November.  But officials managed to put off a fourth increase in the first half of 2016, which […] More

Bank of Iceland Creates Some Surprise, Leaving Interest Rates Unchanged

December 9, 2015

Sedlabanki’s 7-day collateralized lending rate had earlier been increased this year by 50 basis points each in June and August as well as 25 bps last month to 6.5%.  Underlying inflation is expected to rise, but policymakers lately believe that inflation in the near term will be lower than imagined before because of a firmer krona […] More

Benign Data and Market Action

August 19, 2015

The dollar did not change on balance overnight against the euro or sterling.  Other changes were mute, too, including a 0.1% uptick versus the yen. Share prices are mostly softer.  Ten-year sovereign debt yields are unchanged in the U.S., Germany, Japan and Britain. WTI oil slipped 0.8% to $42.30 per barrel.  Comex gold firmed 0.4% […] More

Bank of Iceland to Raise Interest Rates Before Long

May 13, 2015

Although the 7-day Icelandic repo rate of 4.5% was left unchanged, officials signaled that a hike is coming. “The Bank’s interest rate reduction late in 2014 was based on a sharp drop in inflation and the decline in inflation expectations, which led to a larger rise in real rates than was considered warranted at that […] More

Bank of Iceland: No Rate Change

March 18, 2015

Iceland’s 4.5% seven-day term deposit rate, 5.25% seven-day collateralized lending rate, and 6.25% overnight lending rate were left unchanged after the latest review by the Monetary Policy Committee, which released a very similar statement to the prior one on February 4.  Officials are treating the recent slide of inflation cautiously. Inflation has measured 0.8% in […] More

Bank of Iceland Cuts Interest Rate

November 5, 2014

Iceland’s one-week central bank lending rate was changed today for the first time in two years.  A cut of 25 basis points to 5.75% reversed a similar-sized increase in November 2012 that culminated 175 basis points of tightening begun in August 2011.  The explanation in a released statement focused on lower inflation and indications of […] More

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