Business News
Iceland lowers key rate to 6.25 per cent
Sep 22, 2010, 13:24 GMT
Reykjavik - Iceland's central bank Wednesday lowered its key rate by 0.75 percentage points to 6.25 per cent, citing declining inflation.
Weaker economic activity and a stronger krona were factors that contributed to the fall in inflation, the central bank said.
Inflation was at 4.5 per cent, compared the central bank's goal of 2.5 per cent.
In August the central bank lowered the rate, which is for seven- day collateralised lending, by one percentage point.
In the autumn of 2008, three of the North Atlantic nation's major banks collapsed when the international financial crisis began to emerge.
Interest rates shot up and were close to 20 per cent at one stage.
The government led by Social Democratic premier Johanna Sigurdarddottir has begun negotiations to join the European Union.
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