Central Bank of Iceland

November 18, 2020

Monetary officials in Iceland cut their seven-day term deposit rate by 25 basis points to 0.75%, bringing the cumulative rate reduction since February to 225 basis points. Today’s was the first cut since a 75-basis point reduction in May. A released statement from the Monetary Policy Committee also announced that Icelandic GDP is likely to drop in 2020 by a percentage point greater than the minus 7.5% figure predicted back in August. Growth in 2021 also was downgraded. Today’s action was done in spite of a recent uptick in inflation to 3.6%, but officials note that inflation expectations remain anchored.

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

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