Bloomberg News

Iceland’s Central Bank Discussed Unchanged Rates, Minutes Show

November 16, 2011

Nov. 16 (Bloomberg) -- Members of the Icelandic central bank’s policy board discussed keeping the island’s benchmark rate unchanged or raising it by as much as 0.25 percentage points, according to the minutes of the bank’s Oct. 31 and Nov. 1 rate meetings, published today.

“The governor proposed that the bank’s interest rates be raised” by 0.25 percentage points, the minutes showed. Keeping the rates unchanged was also discussed.

“Four members voted in favor of the governor’s proposal on the grounds that inflation was still high and forecast to remain elevated throughout the forecast horizon and that there remained material risks that the current high inflation rate could become entrenched.”

The bank raised the benchmark seven-day collateral lending rate to 4.75 percent from 4.5 percent on Nov. 2, to combat inflation pressures.

--Editor: John Simpson

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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