Second Icelandic Central Bank Rate Cut Larger than the First One
November 20, 2024
Iceland’s central bank interest rate had been held at 9.25% from August 2023 until an initial rate cut last month of 25 basis points. Today’s second reduction doubled the size of that increment. A released statement observes a broadly shared disinflation, lessening price expectations, and higher unemployment to justify today’s steeper drop. At 8.5% compared to a 34-month low rate of CPI inflation last month of 5.1%, policy remains restrictive. “Persistent inflation and inflation expectations above target (of 2.5%) call for caution.”
Copyright 2024, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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