Bank of Iceland

October 1, 2014

The seven-day Icelandic collateralized lending rate was left unchanged as expected at 6.0%, its level since a 25-basis point hike in November 2012 culminated 175 basis points of tightening begun in August 2011.  A statement from the Monetary Policy Committee observes that economic growth slowed in the first half of 2014 but remains consistent with official expectations.  The statement notes that inflation of 1.8% now has been lower than target for the past eight months.  However, long-term price expectations remain a bit above target.  Monetary conditions have lately been tighter than envisaged, and the central bank has done some foreign exchange intervention to stem the extent of krona appreciation.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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