Central Bank of Iceland Lowers Policy Rate Skip to content

Central Bank of Iceland Lowers Policy Rate

The Monetary Policy Committee of the Central Bank of Iceland has decided to lower the bank’s policy rate by 0.5 percent to 9.5 percent. The 12-month inflation measured 6.6 percent yesterday and has not been lower in two years, according to Statistics Iceland.

The Central Bank of Iceland. Copyright: Icelandic Photo Agency.

The deposit rate (current account rate) will be lowered to eight percent. The maximum bid rate for 28-day certificates of deposit (CDs) will be 9.25 percent, while the seven-day collateral lending rate will be 9.5 percent and the overnight lending rate 11 percent, as stated on the Central Bank’s website.

This is good news for Reykjavík chefs Tómas Tómasson of Hamborgarabúllan, and Úlfar Eysteinsson of Thrír frakkar, who vowed in May not to shave until the policy rate had dropped below ten percent.

“We decided to lower the policy rate for the nation and now we are about to succeed,” Tómasson told Stöd 2 yesterday.

By Christmas both chefs sported such long white beards that they decided to play Santa Clauses and visited 27 playschools in Reykjavík and treated 1,100 children to candles and cards—old fashioned Icelandic Christmas presents.

When asked whether they recommend this method of protest, Eysteinsson replied: “Absolutely, this doesn’t harm anyone and makes people smile.” Tómasson added: “Not to mention how effective it is.”

Click here to read about the Central Bank’s last policy rate decision and here to watch a footage of the two bearded protestors, who can finally shave today.

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