Iceland's Central Bank Cuts Key Rate - by Joel Sherwood
Iceland's central bank cut its benchmark interest rate by 1.5 percentage points to 15.5% in a move that signals a degree of increased currency and price stability. However, strict controls on capital movements, tying down foreigners' investments in the country, must remain in force for now, the bank said. The cut was the Central Bank of Iceland's second in less than a month. It cut the rate by one percentage point March 19. The central bank said in a statement that "inflation pressures have continued to subside" and that there is "scope for continued careful easing of monetary restraint without jeopardizing the stability of the [Icelandic] krona."
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