Business News
Iceland's central bank lowers interest rate to 11 per cent
Nov 5, 2009, 14:32 GMT
Reykjavik - Iceland's central bank Thursday lowered its key interest rate by 1 percentage point to 11 per cent.
Announcing its decision, the Monetary Policy Committee said the currency 'has remained broadly stable since late summer, although at a lower value than is desirable.'
Inflation was falling and in October was on 9.7 per cent year-on- year, and expected to 'fall sharply in 2010,' the central bank said.
The central bank's most recent rate cut was in June.
A year ago the global financial crisis sparked the collapse of three of the North Atlantic nation's major banks and a rapid depreciation of the krona.
The Monetary Policy Committee said it would 'move cautiously' on further easing rates, echoing recommendations from the International Monetary Fund (IMF) that has also backed retaining capital restrictions.
In the wake of the crisis, interest rates at the end of October 2008 were hiked to 18 per cent, and Iceland secured a 2.1-billion- dollar loan from the IMF.
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