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Political Economy

Iceland keep rates the same

Wednesday, 12 December 2012
Iceland's Central Bank has decided on Wednesday to leave its interest rates unchanged 6.00 percent.

According to various news reports, the policy rate was last modified on 14 November, when it was raised by 25 basis points.
The Icelandic economy is doing fine now after a period of economic chaos when its major banks collapsed in the 2008/9 and which led to diplomatic tension between the little island nation and Britain and the Netherlands.

Earlier, officials from Iceland’s central bank had said that interest rates could rise further to compensate for increased wage settlements. Central bank (Sedlabanki) governor, Mar Gudmundsson, has said that although the bank could raise rates again, they were likely to remain steady in the short term.

Gudmundsson said to media outlets, according to Reuters: “When we say that we are done with interest rate rises, then we are looking at the baseline forecast,”. Added, “But there is a proviso there. We said its contingent on revision of the wage contracts being consistent with inflation going down to target..."
By Scancomark.com Team

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