Off the wire
• Indian official denies troops stage "hot pursuit" against rebels in Myanmar  • Chinese economic fugitive arrested, deported after hiding in Cambodia for 6 years  • Former U.S. police officer in Kenyan court over illegal firearms  • Dutch economic recovery continues with more positive figures  • Italian PM urges Russian president to fully implement Minsk agreement  • 18 killed in violence, airstrikes against IS in Iraq  • Pakistani forces battling militants in Waziristan's "last few pockets"  • African nations sign agreement on grand trade area  • Xiaomi props up presence in online video  • News Analysis: Emerging Salafists not big threat to Hamas  
You are here: 　 Home

Central Bank of Iceland raises benchmark rate

Xinhua, June 10, 2015 Adjust font size:

The monetary policy committee of the Central Bank of Iceland (CBI) decided Wednesday to raise one of its benchmark rates by 0.5 percent.

The seven-day term deposits rate was raised to 5.0 percent from 4.5 percent, according to a statement on CBI's website.

According to newly published national accounts, gross domestic product (GDP) growth measured 2.9 percent in the first quarter this year. This figure, together with the strong recovery of the labor market and the increase of domestic demands, consumption and investment, indicates that economic activity is growing broadly in line with the bank's forecast in May.

Although inflation is still low, the economic outlook is higher than the bank projected in May because recently negotiated wage increases were significantly larger than predicted.

The Icelandic government announced several measures to pave the way for lifting the long-standing capital controls on Monday. Some of these measures will generate revenues for the treasury, and it is important that these revenues be allocated so as not to stimulate the domestic economy.

It seems that a sizeable rate increase will be necessary in August, followed by further rate hikes in the coming term, so as to ensure price stability over the medium term, according to the statement. Endit