Wednesday, April 20, 2011

Iceland Central Bank Holds Interest Rate at 4.25%

Iceland's Sedlabanki held its seven-day collateral lending rate at 4.25%, and kept the deposit rate at 3.25% and overnight lending rate at 5.25%.  Iceland reported headline inflation of 2.3% in March, which is forecast to peak just above 3.0% later this year.  Iceland's economy contracted 1.5% in 4Q 2010, bringing total growth in 2010 to 3.5%, the Bank is forecasting 2011 growth of 2.3%, down from its original forecast of 2.8%.  Iceland is currently at risk of a credit downgrade due to the Icesave dispute.


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