Islandia - Suku Bunga

The Central Bank of Iceland slashed its rate on seven-day term deposits by 25bps to a record low of 3 percent during its November meeting. It follows a similar cut in October and was the fifth time this year that interest rates were lowered. Policymakers said the outlook for economic growth in the second half of the year deteriorated while GDP growth in the first six months of 2019 was higher-than-expected. The central bank forecasts GDP to contract by 0.2 percent in 2019 and to expand by 1.6% in 2020. In October, inflation eased to 2.8 percent, its lowest since October 2019 and it is projected to reach the 2.5 percent target at the end of the year.

The Central Bank of Iceland lowered its rate on seven-day term deposits by 25 bps to a record low during its October meeting, saying economic growth continued to slow in the first half of this year. In September, annual inflation rate declined to 3.0 percent from 3.2 percent in August while inflation expectations have fallen since the last meeting of the Committee. The Board also noted, that recent developments suggest that economic activity has been more robust than expected.

The Central Bank of Iceland lowered its rate on seven-day term deposits by 25bps to 3.5 percent during its August meeting, saying the GDP growth outlook for 2020 has deteriorated on the back of the strong contraction in tourism while inflation expectations have fallen back to target. Still, policymakers noted that this year’s economic contraction will measure 0.2 percent, slightly less than was forecast in May, due mainly to more resilient private consumption growth, although the contribution of net foreign trade is also more positive, as demand has shifted towards domestic production. Near-term monetary policy decisions will depend on the interaction between developments in economic activity, on the one hand, and inflation and inflation expectations, on the other.

The Central Bank of Iceland lowered its seven-day term deposit rate by 25bps to an all-time low of 3.75% on June 26th 2019, following a 50bps cut in the previous month, saying inflation expectations have fallen. In June, inflation rate dropped to 3.3 percent from a five-month high of 3.6 percent in May, and in line with the Central Bank’s forecast. Policymakers kept the economic outlook from the previous MPC meeting, at which GDP was projected to shrink by 0.4 percent in 2019 and inflation to return to the target of 2 percent by mid-2020 but the contraction in tourism is expected to be deeper than previously expected.

The Central Bank of Iceland lowered its seven-day term deposit rate by 50bps to an all-time low of 4% on May 22nd 2019, saying output is now forecast to contract by 0.4% this year instead of rising by 1.8%, as was expected in February amid a contraction in tourism and reduced marine product exports. Also, policymakers forecast that inflation will peak at 3.4% in mid-2019 and then ease back to the target by mid-2020.

The Central Bank of Iceland kept its seven-day term deposit rate at 4.5% at its March 20th 2019 meeting, as widely expected. Although the inflation eased to 3% in February and the krona appreciated since the last monetary meeting, inflation is expected to rise somewhat over most of the year, depending on the results of the ongoing wage negotiations. Policymakers noted that GDP growth slowed between the 1st half and 2nd half of 2018, and was 4.6% in 2018, above bank projections of 4.3%. Still, recent indicators of economic activity and the labour market suggest that demand pressures in the economy continue to subside. Policymakers added that long-term inflation expectations are still above target and reiterated they could call for a tighter monetary stance in coming months.