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Icelandic central bank leaves key interest rate at 5 percent
February 8, 2017 / 9:13 AM / 9 months ago

Icelandic central bank leaves key interest rate at 5 percent

COPENHAGEN, Feb 8 (Reuters) - Iceland’s central bank kept its key deposit rate unchanged at 5.0 percent on Wednesday and expects economic growth to remain rapid in 2017.

The central bank estimates 2016 economic growth at 6 percent, above the 5 percent forecast in November.

It expects growth to “remain rapid,” at 5.33 percent in 2017 and 2.5 to 3 percent in 2018 and 2019.

“Rapid growth in economic activity and clear signs of growing demand pressures in the economy call for a tight monetary stance to ensure medium-term price stability,” the central bank said in a statement.

The central bank cut its key deposit rate in December by 0.25 percentage points, in a bid to weaken Iceland’s currency, the crown.

The inflation outlook is unlikely to have changed from the previous forecast by the central bank in August, it said. (Reporting by Jacob Gronholt-Pedersen, editing by Larry King)

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