The Central Bank’s Monetary Policy Committee (MPC) announced today that the rates of the Central Bank will be as follows: overnight lending rate, 7 percent; seven-day collateralized lending rate 6 percent; Maximum rate on 28-day certificates 5.75 percent; current account 5 percent.
These junior college students were hardly thinking about interest rates while playing football (soccer) on the frozen Reykjavík pond, Tjörnin, last Friday. Photo: Páll Stefánsson/Iceland Review.
Below is an extract from the bank’s statement.
Recent economic indicators suggest that output growth was weaker in 2012 than previously anticipated, and the outlook for 2013 is for more modest growth than was forecast in November. Total hours worked have also risen less than previously forecasts.
Although a slower rate of growth will ease inflationary pressures somewhat as the forecast horizon progresses, near-term inflation is projected to be higher than was forecast in November, owing to a weaker króna. The inflation outlook for the forecast horizon as a whole is therefore broadly unchanged since then.