Central Bank of Iceland

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

Central Bank of Iceland Keeps Main Interest Rate at 5.25%

October 5, 2016

The seven-day term deposit rate had been cut in August by 50 basis points to 5.25%, partly reversing 125 basis points of tightening between June and November of 2015. One development against cutting the rate again is the rise of consumer prices last month, but a statement released after the latest policy meeting attributes the […] More

Central Bank of Iceland

August 24, 2016

Icelandic monetary authorities implemented their first interest rate change, a reduction of 50 basis points, since a hike last November and their first rate cut since December 2014. Moreover, forward guidance on future rate changes switched from a bias toward increases to an ambivalent signal. After the Monetary Policy Committee’s prior meeting in early June, […] More

Central Bank of Iceland

May 11, 2016

Inside of less than a six-month span, the seven-day collateralized Icelandic lending rate was raised three times by 50 basis points each between June 2015 and last November to the current 6.5% level.  Such is four times greater than April’s on-year pace of CPI inflation.  Those tightenings of policy represented a normalization process and pre-emptive […] More

Central Bank of Iceland

March 16, 2016

The Monetary Policy Committee has retained a 6.5% 7-day collateralized lending interest rate.  Prior hikes were made of  50 basis points last June and August as well as 25 bps in November, which was the most recent change.  A statement released today by the committee commits policy to further tightening because of accelerating domestic inflationary […] More

Central Bank of Iceland

February 10, 2016

Iceland’s Monetary Policy Committee previously raised its seven-day collateralized lending rate from 5.25%  to 5.75% in June 2015, to 6.25% in August 2015, and to the current level of 6.5% this past November.  Monetary policy has been tightening in Iceland even as other central banks in Europe like the ECB adopted looser stances.  This contrast […] More

Central Bank of Iceland Raised Reserve Requirement but Left Interest Rates Unchanged for Now

September 30, 2015

The reserve requirement ratio was doubled to 4% after the latest monetary policy meeting.  The seven-day collateralized lending rate stays at 6.25%, and the one-week term deposit rate is 5.5%, also unchanged.  Rates were increased earlier by 50 basis points in June (in a first hike since November 2012) and again in August.  Moreover, a […] More

Central Bank of Iceland

August 19, 2015

An increase of the seven-day Icelandic collateralized lending rate on June 10 reversed the direction of monetary policy, and the Monetary Policy Committee today followed that action with a second 50-basis point hike to 6.25%, thus surpassing by 25 basis points the level that had prevailed from end-2012 until a cut in November 2014.  Officials […] More

Back-to-Back Icelandic Interest Rate Cuts

December 10, 2014

Sedlabanki’s Monetary Policy Committee has followed up November’s 25-basis point cut with a greater-than-forecast 50-bp reduction in Iceland’s seven-day lending rate to 5.25%, which is the lowest level in 2-1/2 years.  A released statement justifies the action by lower inflation than forecast and signs that expected inflation has fallen, too.  More cuts are not ruled […] More

Icelandic Monetary Policy Rate Remains Paused

June 11, 2014

The last six changes in Sedlabanki’s 7-day collateralized lending rate were all increases, but the last of these occurred nineteen months ago on November 14, 2012.  A 25-basis point hike announced that day followed similarly-sized hikes in June and March of 2012 and August and November of 2011.  There was also a 50-basis point tightening […] More