Iceland hikes rates by 25bp
Inflation continues to rise as central bank aims to pre-empt effects of energy shock
The Central Bank of Iceland has raised interest rates today (March 18).
The bank’s monetary policy committee voted overwhelmingly in favour of the 25 basis point increase, with two of its five members wanting to go one step further and raise rates by 50bp. The bank’s key policy rate, the seven-day term deposit rate, is now 7.5%.
Iceland went through a steep hiking cycle following the pandemic: the policy rate rose from 0.75% in April 2021 to 9.25% in August 2023 before gradually easing to 7.25% by
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