Business News
Iceland's central bank lowers interest rate to 8.50 per cent
May 5, 2010, 13:47 GMT
Reykjavik - Iceland's central bank Wednesday lowered its key interest rate by one-half point to 8.50 per cent, noting that the currency has been stable since the March meeting of the bank's Monetary Policy Committee.
Capital controls and the interest rate differential with major currencies had helped support the krona, the bank said, adding that there was no immediate scope to ease capital controls.
Inflation fell in April after a slight rise in February and March and was on 8.3 per cent year-on-year, the central bank said.
The central bank Sedlabanki's most recent rate cut was in March.
In October 2008 the global financial crisis sparked the collapse of three of the North Atlantic nation's major banks and a rapid depreciation of the krona.
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 International Monetary Fund (IMF).
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