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Iceland’s Central Bankers Unanimous on Keeping Rates Unchanged

Members of the Icelandic central bank’s monetary policy board were unanimous on keeping its benchmark interest rate unchanged at 6 percent at its Nov. 4-5 meetings.

“Committee members agreed that if wage increases were in line with the forecast, it would probably be necessary to raise the bank’s nominal interest rates,” according to the minutes published in Reykjavik today. “Particularly if the margin of spare capacity in the economy continued to narrow.”

Governor Mar Gudmundsson “proposed that rates be held unchanged” and all five board members voted in favor of the proposal. “Two members expressed mounting concern, however, at the persistence of inflation and inflation expectations,” the minutes showed.

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