Policy Rate in Iceland Remains at 12 Percent Skip to content

Policy Rate in Iceland Remains at 12 Percent

By Iceland Review

The Monetary Policy Committee of the Central Bank of Iceland announced its decision this morning to maintain the policy rate at 12 percent. Employer and labor unions had hoped that the percentage of the policy rate would drop below ten percent today.

The Central Bank of Iceland. Photo by Páll Stefánsson.

The interests of loans against collateral will also remain at 12 percent, while interests of business accounts at deposit institutions remain at 9.5 percent. Daily loan interests will drop from 16 to 14.5 percent, ruv.is reports.

The stability pact between the government, employer and labor unions assumes that the policy rate will drop below ten percent by November 1. That will not happen, since the Central Bank’s next policy rate decision will not be made until November 5, mbl.is reports.

Four ministers of the cabinet, representatives of the Icelandic Confederation of Labor (ASÍ) and of the Confederation of Icelandic Employers (SA) discussed the status of the stability pact all day yesterday and whether the pact’s presumptions were no longer at hand, RÚV reports.

This is the first policy rate decision made by the new governor of the Central Bank, Már Gudmundsson, who assumed the position last month.

Click here to read more about Gudmundsson’s appointment and here to read more about the stability pact.

Sign up for our weekly newsletter

Get news from Iceland, photos, and in-depth stories delivered to your inbox every week!

* indicates required

Subscribe to Iceland Review

In-depth stories and high-quality photography showcasing life in Iceland!