11 December 2019

Statement of the Monetary Policy Committee 11 December 2019

Central Bank of Iceland and the mountain Esja

The Monetary Policy Committee (MPC) of the Central Bank of Iceland has decided to keep the Bank’s interest rates unchanged. The Bank’s key interest rate – the rate on seven-day term deposits – will therefore remain 3%.

According to recently published national accounts figures, output growth measured 0.2% for the first nine months of the year. Although this is slightly stronger growth than the Central Bank forecast in November, overall developments year-to-date are in line with the Bank’s projections.

Headline inflation measured 2.7% in November and has fallen between months, as has underlying inflation. The inflation outlook is broadly unchanged since the MPC’s last meeting, and inflation expectations are at target by most measures. The monetary stance has therefore remained largely unchanged between MPC meetings.

Near-term monetary policy decisions will depend on the interaction between developments in economic activity, on the one hand, and inflation and inflation expectations, on the other.

Interest rates 11 December 2019

No. 25/2019
11 December 2019