Iceland raises rates again as inflation reaches highest level since 2012

Central Bank of Iceland
Central Bank of Iceland

The Central Bank of Iceland’s monetary policy committee increased its benchmark rate by 75 basis points to 2.75% on February 9.

It cited an adverse inflation forecast, which “has deteriorated markedly since the MPC’s last meeting”. The rate increase is the fifth and largest rise in a series since May 2021.

Experts said the inflation was driven in large part by a housing market with swelling asset prices and potentially problematic mortgages.

Iceland became one of the first advanced economies

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