The Monetary Policy Committee (MPC) of the Central Bank of Iceland lowered the policy rate by one percent this morning, from 11 to ten percent. The deposit rate (current account rate) will drop by 0.5 percent to 8.5 percent.
The Central Bank of Iceland. Photo by Páll Stefánsson.
The Central Bank will continue to issue 28-day certificates of deposit (CDs) with a maximum bid rate of 9.75 percent, down by 0.5 percent, as stated on the Central Bank’s website.
The seven-day collateral lending rate will be lowered by one percent to ten percent and the overnight lending rate by 1.5 percent to 11.5 percent.
The Central Bank’s MPC lowered the policy rate from 12 to 11 percent last month. Today’s decision came as a surprise to the analysis department of Íslandsbanki, which had expected that the policy rate would remain unchanged, mbl.is reports.
The next policy rate decision will be announced on January 27, 2010.
Click here to read about the last policy rate decision.