Central Bank of Iceland

March 14, 2018

Sedlabanki’s Monetary Policy Committee, meeting just five weeks after the last policy review, decided to leave Iceland’s seven-day time deposit rate at 4.25%, the level since a 50-basis point reduction in August 2016. While observing that their outlook for inflation is broadly unchanged, but the committee’s post-meeting statement concedes that a marginal uptick in expected […] 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

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

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 Shifts Gears

June 10, 2015

First some policy history.  Iceland’s seven-day collateral lending rate was slashed in 15 steps to 4.25% by February 2011 from 18.00% prior to March 2009.  Then, seven increased between August 2011 and end-2012 lifted the rate back to 6.0%.  The next directional reversal came late last year, cuts of 25 basis points in November followed […] 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

Central Bank of Iceland Elects Not to Cut Interest Rate at February Meeting

February 4, 2015

The seven-day Icelandic rate had been cut by 50 bps in December and 25 bps in November 2014, reversing 43% of a previous 175-basis point rise in six steps between August 2011 and November 2012.  A statement released by the Monetary Policy Committee explains why a further deceleration of inflation to 0.8% in December-January did […] More

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 […] More

Central Bank of Iceland

October 2, 2013

Iceland’s Monetary Policy Committee left its 7-day collateralized interest rate at 6.0%, a third as much as the pre-March 2009 high and the prevailing level since a 25-basis point increase in November 2012, which had been the sixth advance since August 2011 from a base of 4.25%.  Icelandic GDP growth was roughly 2% in the […] More

Bank of Iceland Keeps 7-Day Lending Rate at 6.0%

August 21, 2013

A released statement from Iceland’s Monetary Policy Committee following today’s fifth policy meeting of 2013 made no changes to the final paragraph including the sentence on forward interest rate guidance. The degree to which such normalization takes place through changes in nominal Central Bank rates will depend on future inflation developments, which in turn will […] More