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Iceland raises key interest rate

The Central Bank in Iceland raised its key interest rate last Thursday in an attempt to control the inflation and prevent a further imbalance in the economic system.

The Central Bank lifted the rate by one fourth of a percentage point to 14.25 percent and announced that it would also raise its other interest rates by the same percentage point, as reported on the website of the Herald Tribune.

Since 2004 the Central Bank in Iceland has steadily increased its interest rates. In September this year it raised the rate of key interest by half a percentage point.

The bank’s goal is to keep the inflation at 2.5 percent: currently it lies at 7 percent.

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