Iceland confounds expectations with rate hold

The Central Bank of Iceland surprised markets on Thursday, opting to hold rates, rather than raise them.

The benchmark weekly lending rate stands at a record high of 15.5%. However, most analysts expected borrowing costs to rise further on the back of rampant inflation, which soared from 8.7% in March to 11.8%.

But the central bank said that while further surges were likely in the short term, inflation would moderate with rates at their current level.

"Increased domestic costs due to the

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