Status of domestic and international payment intermediation: Payments to Iceland
The importance of smoothly functioning cross-border payment intermediation through Iceland's commercial banks is apparent to all. Because of the difficulties with cross-border payments in the past few weeks, the Central Bank has decided to act as an intermediary in instances where other channels were closed.
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Foreign exchange market
Because of the unusual circumstances that arose in the Icelandic banks’ operations in October, interbank transactions in foreign currency were interrupted. The three commercial banks had previously acted as market makers in that market in accordance with regulatory provisions on bid frequency, price formation, and other issues.
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Central Bank of Iceland raises the policy rate
On October 15, 2008, the Board of Governors of the Central Bank of Iceland announced a policy rate reduction to 12%. That decision was explained by dramatically changed circumstances in the Icelandic economy: contraction was under way, further contraction was expected, and demand and expectations had plummeted.
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Webcast
At 11 AM (11 GMT) today there will be a press conference, in Icelandic. It will be broadcast on the Bank's website. There, the Board of Governors will present rationale behind the interest rate decision today.
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Central Bank of Iceland raises the policy rate
The Board of Governors of the Central Bank of Iceland has decided to raise its policy interest rate by 6 percentage points to 18%.
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