(Finance) – The Monetary Policy Committee (MPC) of the Central Bank of Iceland decided to keep interest rates unchanged at 9.25%.
Inflation has risen marginally since the last MPC meeting, after easing earlier this year.Core inflation remains high and price increases are widespread, although the contribution of the real estate component is still significant. In addition, inflation expectations are largely unchanged and have remained above target.
Domestic demand has eased over the past year, in line with a tighter monetary stance. However, some demand pressures remain in the domestic economy and have eased very little since the MPC meeting in May. “It therefore appears that it will take some time to reach an acceptable rate of disinflation,” it is stressed.
“The MPC believes that the current monetary stance is sufficient to bring inflation back to target, but persistent inflation and strong domestic demand require caution“, is added.
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