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Key interest rate still unchanged

The management of the Central Bank in Iceland decided today not to change the key interest rate, which remains at 14.25 percent. The bank changed the key interest rate most recently in December.

On December 21, 2006, the Central Bank decided to raise the key interest rate by 0.25 percent to fight inflation. Mbl.is reports.

On February 8 this year the Central Bank announced the key interest rate would remain unchanged at 14.25 percent as the bank’s measures in December had proven successful in reducing inflation.

The Central Bank will revise its decision on the key interest rate next on May 16.

According to a Bloomberg report released yesterday, currency brokers have begun protecting themselves for when the Central Bank lowers the key interest rate.

The report said the Icelandic Krona currency had increased second most in value compared to the Euro and the Dollar.

Foreign investors have bought a lot of Krona due to the high interest rate in Iceland.

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