Second Icelandic Interest Rate Cut in A Week

March 18, 2020

The Central Bank of Iceland (Sedlabanki) at an unscheduled meeting lowered its 7-day term rate by another 50 basis points to a record low of 1.75%. The rate was cut by 50 basis points and reserve requirements were reduced to zero percent at the Bank’s Monetary Policy Committee’s March 11 meeting. The spreading covid-19 pandemic was cited for the earlier easing, and a statement released today reiterated that message. The rate was also reduced in February by 25 basis points and cut six times during 2019 by 25 basis points each time. Icelandic GDP growth in 2019 of 1.9% was only half as fast as in 2018. CPI inflation accelerated to 2.4% last month but is projected to stay manageably low.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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