Central Bank of Iceland

Central Bank of Iceland Retains 4.25% Key Interest Rate

June 13, 2018

Iceland’s 7-day term interest rate has been at 4.25% since a 25-basis point cut last October, which culminated a 4-step easing cycle that included 25-bp cuts in May and June of last year and an initial 50-bp downmove in August 2016. These reductions exactly reversed three previous rate hikes done in June, August and November […] More

Central Bank of Iceland

May 16, 2018

Iceland’s Monetary Policy Committee agreed to leave its 7-day term deposit rate at 4.25%. It’s been at that level since a 25-basis point cut last October versus 5.0% at the end of 2016 and 5.75% at the end of 2015. According to a released statement, the monetary stance is tight and appropriately so in order […] More

Central Bank of Iceland

February 7, 2018

The Monetary Policy Committee at Sedlabanki kept Iceland’s seven-day term deposit rate at 4.25%, its level since a 25-basis point cut in October 2017 that culminated four moves totaling 125 basis points of reduction since August 2016. Those declines fully reversed rate hikes previously during 2013. Officials released a rather hawkish statement that suggests that […] More

Central Bank of Iceland

December 13, 2017

Iceland’s Monetary Policy Committee had implemented cuts of its seven-day term interest rate of 50 basis points in August 2016 and of 25 basis points each earlier this year in May, June and October. The collective decline of 125 basis points exactly reversed hikes during 2015, leaving the level at 4.25%. The statement released today […] More

Central Bank of Iceland

November 15, 2017

Iceland’s seven-day term rate had been cut 25 basis points last month and earlier by 50 basis points in August 2016 and 25 bps each in May and June of this year. But a statement released after the latest review believes that the interest rate of 4.25% is appropriate for now. “The current monetary stance […] More

Central Bank of Iceland

May 17, 2017

A stronger anchor for inflation expectations at target and the appreciation of the kr√≥na have enabled the Monetary Policy Committee to achieve its legally mandated price stability objective with a lower interest rate than would otherwise have been possible. Officials undertook a third cut of the 7-day repo rate during the past year, but at […] More

Central Bank of Iceland

March 15, 2017

The seven-day Icelandic deposit rate was left at 5.0%. Reductions of 50 basis points last August and 25 bps in December reversed two increases that had been engineered in August and November of 2015. A statement released today by the monetary policy committee called the stance “tight,” which it is juxtaposed against a 1.9% on-year […] More

Inflection Point in Icelandic Monetary Policy

February 8, 2017

The Monetary Policy Committee retained a 5.0% seven-day repo rate but released a statement that projects rising demand-side pressures, a possibly tighter labor market, and seemingly redirects the bias of policy from ease toward restraint. Economic growth was around 6% last year compared to the Bank’s assumption made last November of 5%. The last two […] More

Central Bank of Iceland Eases Somewhat Unexpectedly

December 14, 2016

The seven-day deposit rate was cut to 5.0% from 5.25%. Although the rate had be reduced by 50 basis points in August, today’s action was somewhat surprising as growth has been strong. In a released statement, officials note that the strength of the krona influenced this second rate reduction of 2016. Inflation measured 2.1% in […] More

Central Bank of Iceland

November 16, 2016

Officials at Sedlabanki had cut the 7-day repo rate by 50 basis points in August. This was a trend reversal following three increases totaling 125 bps between June and November of 2015. Many analysts were expecting a second rate reduction this month and inflation has been under target for almost three years in Iceland and […] More