Icelandic Central Bank Rate Hike

November 17, 2021

The Central Bank of Icelands policy interest rate has also been raised multiple times in response to the recent acceleration of inflation. Today’s hike to 2.0% from 1.5% increased the ante following 25-basis point advances in May, August, and October. “The inflation outlook has deteriorated somewhat since August, owing in part to more persistent global price increases, a more rapid rebound in domestic economic activity, and rising wage costs. The outlook is for inflation to continue rising in coming months but then start to ease, given that inflation expectations remain anchored to the target.” That being said, the statement expresses readiness to tighten more if such becomes necessary. Inflation as of October in Iceland stood at 4.5%.

Copyright 2021, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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