Icelandic Interest Rate Hike – Currency Thoughts
Icelandic Interest Rate Hike
March 18, 2026
Policymakers at the Central Bank of Iceland today followed Australia’s lead yesterday, raising the Icelandic 7-day term rate by 25 basis points in a 3-2 decision that included two dissents favoring an increase of 50 basis points. It was the bank’s first rate increase since August 2023, and the new rate level becomes 7.5%, which comfortably exceeds the 5.2% consumer price inflation readings in both January and February. Policymakers are aiming for an inflation target of 2.5% and took today’s action in spite of more sluggish economic growth.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Central Bank of Iceland
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