IMF says Iceland’s path is clear to easing rates

Housing, bank supervision remain a concern and central bank independence needs safeguards

iceland flag

The International Monetary Fund (IMF) has recommended that the Central Bank of Iceland (CBI) gradually start cutting rates, while paying close attention to bank supervision and the housing market.

Iceland’s monetary policy authority has taken the right steps to combat inflation, which peaked at 10.2% in January 2023, the IMF said in a report on March 22. The central bank started hiking rates in May 2021. It has held its main policy rate at 9.25% since August 2023, the highest in Western Europe.


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