Financial News: Iceland Central Bank Holds Key Rate

Iceland Central Bank Holds Key Rate

10/07/2026 - 05:42:00 (RTTNews)

(RTTNews) - Iceland's central bank maintained its benchmark rate on Wednesday after three rate increases earlier this year. The Monetary Policy Committee of the Central Bank of Iceland unanimously decided to hold the rate on seven-day term deposits at 8.00 percent.

The bank had raised its key rate by 75 basis points since March.

Policymakers noted that measured and underlying inflation remained too high despite clear signs of slowdown in economic activity.

Inflation rose to 5.9 percent in September, the highest in two years, mainly due to the effects of the Middle East conflict and hikes in public levies.

Nonetheless, the committee observed that most indicators suggest that inflation will fall fairly rapidly next year. That said, there is considerable uncertainty, especially as regards developments in the global economy and the domestic labor market, the MPC noted. "In view of this uncertainty and the persistence of inflation and inflation expectations, the MPC considers it appropriate to maintain a tight monetary stance," the bank said in a statement.

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