07. July 2008

Press Conference July 3, 2008: Monetary policy statement by the Board of Governors of the Central Bank of Iceland: Policy rate remains unchanged

The Board of Governors of the Central Bank of Iceland has decided to hold the Bank's policy interest rate unchanged at 15.5%. Inflation rose sharply in the wake of the depreciation of the króna during the first months of the year and is now higher than the Bank forecast in April. According to the forecast published in this Monetary Bulletin, inflation will remain high into next year but decline rapidly thereafter. Lowering the policy rate later than was assumed in the last forecast will bring inflation to target at the time specified in April.