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

Bank of Iceland: No Rate Change

March 18, 2015

Iceland’s 4.5% seven-day term deposit rate, 5.25% seven-day collateralized lending rate, and 6.25% overnight lending rate were left unchanged after the latest review by the Monetary Policy Committee, which released a very similar statement to the prior one on February 4.  Officials are treating the recent slide of inflation cautiously. Inflation has measured 0.8% in […] More