Iceland hikes rates for first time since 2016

Central bank tightens rates as inflation continues to rise above target

Central Bank of Iceland

The Central Bank of Iceland increased its policy rate on November 7 for the first time since August 2016.

The monetary policy committee raised the rate by 25 basis points to 4.5%.

The committee’s statement says expected inflation in Iceland is expected to rise, and to continue above target in 2019. Inflation has followed an upward trend since mid-2017, reaching  2.8% in October. The central bank’s target range is 2.5%.

The rate hike takes place after Iceland’s government announced

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