Key interest rates lowered by 0.25 percentage points
The Central Bank of Iceland. mbl.is/Ómar Óskarsson
The Monetary Policy Committee of the Central Bank of Iceland has decided to lower the bank's key interest rate by 0.25 percentage points. This is the first time since November 2020 that the Central Bank has lowered interest rates.
The bank's main interest rate is now 9%.
The announcement states that inflation has subsided recently, but it was measured at 5.4% last month.
Key Interest Rates
February 9, 2022-October 2, 2024
"Although certain one-off items weigh heavily, the extent and frequency of price increases has decreased. Underlying inflation and inflationary pressure on the bond market has also decreased," says the announcement.
"Economic activity seems to slow down in line with increased monetary restraint. There are also indications that tension in the labor market has decreased and the pessimism of households and companies has increased."
It is stated that persistent inflation, inflation expectations above the target, and high domestic demand call for caution. It is therefore necessary to maintain a suitable level of restraint in order to bring inflation to the target within an acceptable time.
