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Iceland keeps interest rates unchanged

Xinhua, February 4, 2015 Adjust font size:

The Monetary Policy Committee (MPC) of the Central Bank of Iceland decided to keep its interest rates unchanged due to the unclear economic situation, according to a statement released by the bank on Wednesday.

The rates on seven-day collateral lending and seven-day collateral lending, which had remained unchanged from late 2012 to the beginning of last November, will remain 4.5 percent and 5.25 percent.

Since the economic outlook is in many aspects more uncertain than before, the MPC considered it appropriate to wait until the economic situation becomes clearer, said the statement.

Preliminary figures showed GDP growth was weaker in the first three quarters of 2014 than the bank forecast in last November. Therefore, the bank lowered the 2014 GDP growth forecast from 2.9 percent to 2 percent. On the other hand, the bank raised its forecast of 2015 from 3.5 percent to 4.2 percent.

Inflation was at a low level of only 0.8 percent in December and January and inflation expectations have fallen as well in recent months. Endit