Sedlabanki
Varying Central Bank Interest Rate Changes to Tackle Inflation
October 6, 2022
The global environment of high inflation, slower economic growth, and central banks raising interest rates has favored the dollar. The weighted DXY dollar index climbed 0.4% overnight. Although the poorly received plan to eliminate the highest British tax bracket has been withdrawn, British financial markets remain especially vulnerable. Sterling is 0.5% weaker today against the […] More
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 […] More
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 […] More
Bank of Iceland
October 2, 2019
Officials at the Bank of Iceland engineered their fifth reduction since March of the seven-day term deposit rate, which was lowered by 25 basis points to 3.25%. Earlier cuts were done in August, June, May and March and totaled 125 basis points. In a released statement, the Monetary Policy Committee observes a drop in expected […] More
Sedlabanki Officials Ease Monetary Policy Again
August 28, 2019
The Central Bank of Iceland’s key seven-day interest rate was cut for the fourth time in 2019, following moves in March, May, and June. The 3.50% new rate level is down 125 basis points altogether after today’s latest 25-bp adjustment. In a released statement from the Monetary Policy Council, officials said inflation expectations had eased […] More
Central Bank of Iceland
March 14, 2018
Sedlabanki’s Monetary Policy Committee, meeting just five weeks after the last policy review, decided to leave Iceland’s seven-day time deposit rate at 4.25%, the level since a 50-basis point reduction in August 2016. While observing that their outlook for inflation is broadly unchanged, but the committee’s post-meeting statement concedes that a marginal uptick in expected […] More
Central Bank of Iceland
August 24, 2016
Icelandic monetary authorities implemented their first interest rate change, a reduction of 50 basis points, since a hike last November and their first rate cut since December 2014. Moreover, forward guidance on future rate changes switched from a bias toward increases to an ambivalent signal. After the Monetary Policy Committee’s prior meeting in early June, […] More
Bank of Iceland
June 1, 2016
Icelandic monetary policy has been in a tightening cycle since an initial increase in the seven-day collateralized lending rate of 50 basis points in June 2015. That move was followed by two 25-basis point hikes in August and November. But officials managed to put off a fourth increase in the first half of 2016, which […] More
Central Bank of Iceland
March 16, 2016
The Monetary Policy Committee has retained a 6.5% 7-day collateralized lending interest rate. Prior hikes were made of 50 basis points last June and August as well as 25 bps in November, which was the most recent change. A statement released today by the committee commits policy to further tightening because of accelerating domestic inflationary […] More
Central Bank of Iceland Shifts Gears
June 10, 2015
First some policy history. Iceland’s seven-day collateral lending rate was slashed in 15 steps to 4.25% by February 2011 from 18.00% prior to March 2009. Then, seven increased between August 2011 and end-2012 lifted the rate back to 6.0%. The next directional reversal came late last year, cuts of 25 basis points in November followed […] More
