The Central Bank of Iceland raised its key interest rate by 100bps to 3.75% on May 4th, 2022, a fifth consecutive increase in borrowing costs, and signaled further rate hikes in the coming meetings. The Monetary Policy Committee based its decision on efforts to curb accelerating consumer prices, lifted by energy prices globally and housing prices domestically. The annual inflation rate in Iceland accelerated to 7.2% in April, the highest since 2010 and well above the central bank’s target of 2.5%. Due to the war in Ukraine, the MPC upwardly revised inflation forecasts to above 8% in the third quarter of 2022 and said it does not expect inflation to fall below 3% until 2024. The committee also downwardly revised GDP growth estimates to 4.6% for 2022 and 2.6% for 2023, compared to 4.8% and 2.1%, respectively. source: Central Bank of Iceland

Interest Rate in Iceland averaged 6.64 percent from 1998 until 2022, reaching an all time high of 18 percent in October of 2008 and a record low of 0.75 percent in November of 2020. This page provides - Iceland Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Iceland Interest Rate - data, historical chart, forecasts and calendar of releases - was last updated on May of 2022.

Interest Rate in Iceland is expected to be 4.50 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. In the long-term, the Iceland Interest Rate is projected to trend around 5.00 percent in 2023 and 4.00 percent in 2024, according to our econometric models.

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Iceland Interest Rate



Calendar GMT Actual Previous Consensus TEForecast
2021-11-17 08:30 AM CBI Interest Rate Decision 2% 1.5% 1.75%
2022-02-09 08:30 AM CBI Interest Rate Decision 2.75% 2% 2.75%
2022-05-04 08:30 AM CBI Interest Rate Decision 3.75% 2.75% 3%
2022-06-22 08:30 AM CBI Interest Rate Decision 3.75% 4.5%
2022-08-24 08:30 AM CBI Interest Rate Decision
2022-08-24 09:00 AM Monetary Bulletin


Related Last Previous Unit Reference
Interest Rate 3.75 2.75 percent May 2022
Interbank Rate 4.57 4.57 percent May 2022
Money Supply M1 803.17 836.49 ISK Billion Jan 2022
Money Supply M0 127.71 160.71 ISK Billion Jan 2022
Money Supply M2 1565.13 1512.51 ISK Billion Jul 2021
Money Supply M3 2260.10 2222.00 ISK Billion Jul 2021
Foreign Exchange Reserves 880289.00 879561.50 ISK Million Apr 2022
Banks Balance Sheet 4747152.69 4702600.62 ISK Million Jan 2022
Central Bank Balance Sheet 936372.00 963736.00 ISK Million Jan 2022

Iceland Interest Rate
In Iceland, the benchmark interest rate is set by the board of Governors of the Central Bank of Iceland (Seðlabanki Íslands). The main interest rate is the seven-day term deposit rate since May 2014. Previously the Bank’s key rate was the rate on its collateralised loans to financial institutions, but in the wake of the crisis the interest rate on the Bank’s deposits had greater influence on money market, as demand for Central Bank loans had been limited. Therefore the Bank’s key interest rate is the rate on seven-day term deposits.
Actual Previous Highest Lowest Dates Unit Frequency
3.75 2.75 18.00 0.75 1998 - 2022 percent Daily

News Stream
Iceland Hikes Interest Rate by 100bps to 3.75%
The Central Bank of Iceland raised its key interest rate by 100bps to 3.75% on May 4th, 2022, a fifth consecutive increase in borrowing costs, and signaled further rate hikes in the coming meetings. The Monetary Policy Committee based its decision on efforts to curb accelerating consumer prices, lifted by energy prices globally and housing prices domestically. The annual inflation rate in Iceland accelerated to 7.2% in April, the highest since 2010 and well above the central bank’s target of 2.5%. Due to the war in Ukraine, the MPC upwardly revised inflation forecasts to above 8% in the third quarter of 2022 and said it does not expect inflation to fall below 3% until 2024. The committee also downwardly revised GDP growth estimates to 4.6% for 2022 and 2.6% for 2023, compared to 4.8% and 2.1%, respectively.
2022-05-04
Iceland Hikes Interest Rate by 75bps to 2.75%
The Central Bank of Iceland raised its key interest rate by 75bps to 2.75% on February 9th 2022, hiking rates for a fourth meeting in a row to the highest in two years as inflation pressure fueled by rising house prices persists. The annual inflation rate in Iceland accelerated to 5.7% in January, well above the central bank's target of 2.5%. The Monetary Policy Committee noted that it is assumed that headline inflation will ease when house price inflation slows down and global price hikes taper off; however, it is not expected to align with the target until the end of the forecast horizon. The central bank expects the economy to grow around 4.8% this year compared to the 5.1% it projected in November.
2022-02-09
Iceland Hikes Interest Rate to 2%
The Central Bank of Iceland raised its key interest rate by 50bps to 2% during its November 17th, 2021 meeting, hiking rates for a third meeting in a row. The Monetary Policy Committee noted that headline inflation rose to 4.5% in October, largely due to domestic price pressures, namely rising home prices and wage growth, but the contributions from global oil and commodity prices has also grown stronger. The outlook for inflation has deteriorated since August, and is now expected to continue rising in the coming months. Meanwhile, economic growth projections were left unchanged at 4% in 2021, however, 2022 GDP growth is expected to surpass 5% amid better export prospects. Thus, inflation is seen above 4% through the year-end, before aligning with the central bank's 2.5% target in the Q3 of 2022. Policymakers reiterated their commitment to apply the tools at their disposal to ensure that inflation returns to target within an acceptable time range.
2021-11-17