The Central Bank of Iceland announced yesterday that the policy rate would remain at 18 percent. Central Bank governor and chairman Davíd Oddsson said they had been following the advice of the International Monetary Fund (IMF).
The Central Bank of Iceland. Copyright: Icelandic Photo Agency.
Oddsson told reporters that the Central Bank had considered it the appropriate time to start lowering the policy rate and that the bank had notified the IMF of their opinion, mbl.is reports.
The IMF, on the other hand, recommended that the policy rate remain unchanged considering the temporary period of uncertainty in Icelandic politics, Oddsson explained, and the Central Bank’s board of governors had decided to follow the IMF’s recommendation.
The Central Bank raised the policy rate from 12 percent to 18 percent at the end of October, 2008, also in compliance with IMF recommendations.
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