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. source: Central Bank of Iceland

Interest Rate in Iceland averaged 6.75 percent from 1998 until 2021, 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 November of 2021.

Interest Rate in Iceland is expected to be 2.00 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 2.75 percent in 2022 and 3.00 percent in 2023, according to our econometric models.

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Iceland Interest Rate


Calendar GMT Actual Previous Consensus TEForecast
2021-08-25 08:30 AM 1.25% 1% 1%
2021-10-06 08:55 AM 1.5% 1.25% 1.25%
2021-11-17 08:30 AM 2% 1.5% 1.75%


Related Last Previous Unit Reference
Interest Rate 2.00 1.50 percent Nov/21
Interbank Rate 2.38 2.38 percent Nov/21
Money Supply M1 795.66 756.87 ISK Billion Jul/21
Money Supply M0 188.45 222.75 ISK Billion Jul/21
Money Supply M2 1565.13 1512.51 ISK Billion Jul/21
Money Supply M3 2260.10 2222.00 ISK Billion Jul/21
Foreign Exchange Reserves 924690.85 938923.69 ISK Million Oct/21
Banks Balance Sheet 4639299.00 4563205.00 ISK Million Jul/21
Central Bank Balance Sheet 900763.00 896167.00 ISK Million Jul/21

News Stream
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
Iceland Lifts Interest Rate to 1.5%
The Central Bank of Iceland raised its key interest rate by 25bps for a third consecutive meeting to 1.5 percent in October, amid high and persistent inflationary pressures. Signs of warning came specially from inflation expectations that seem to be rising again, although policymakers believe that it is too soon to state if they are becoming less anchored to the inflation target. The Committee also added that indicators show a strong domestic recovery in the third quarter, while the annual growth outlook remained unchanged.
2021-10-06
Iceland Hikes Key Interest Rate to 1.25%
The Central Bank of Iceland raised its key interest rate by 25bps to 1.25% during its August 2021 meeting, to counteract high and persistent inflationary pressures. Policymakers said the economic outlook has improved further since the Bank’s May forecast, with updated GDP growth projections pointing to an expansion of 4% this year, some 0.9 percentage points above the May forecast. The improvement is driven mainly by tourist arrivals, which have increased more rapidly this summer than was previously expected. Unemployment has subsided more than previously forecast, although it remains high, and the slack in the economy has narrowed more quickly. The Committee also noted that headline inflation remained relatively high at 4.3% in July, although it has begun to ease, and it is expected to soften somewhat more slowly than projected earlier. 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.
2021-08-25

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.