The Monetary Policy Committee of the Central Bank of Iceland has decided to lower the bank’s interest rate by 0.5 percentage points.
The bank’s prime interest rate will therefore now be 8.0%.
All committee members supported this decision.
A statement from the Central Bank states that inflation continued to decline in January and is now 4.6%. Underlying inflation has also declined and has not been lower for three years. The outlook is for continued deflation in the coming months.
The rise in house prices has slowed and tensions in the economy are easing.
The Central Bank warns that inflationary pressures are still present, calling for continued monetary policy restraint and caution. In addition, there is uncertainty in the global economy.
Finnbjörn A. Hermannsson, president of ASÍ, the Icelandic Confederation of Labour, says the decrease is in line with expectations.
Source: Ruv.is
