Iceland keeps rates unchanged despite above-target inflation
Rate-setters see higher inflation expectations as a short-term phenomenon
The Central Bank of Iceland left interest rates unchanged today (December 12) after the meeting of its monetary policy committee.
The main policy rate stands at 4.5% after the central bank implemented a 25-basis point hike in early October. The committee has declined to further tighten financial conditions despite the sharp increase in inflation recorded last month. Year-on-year prices was 3.3% in November, up from 2.8% in October. Inflation has remained above the 2.5% target since June.
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