COPENHAGEN, Oct 5 (Reuters) - Iceland’s central bank kept its key deposit rate unchanged at 5.25 percent on Wednesday.
“The likelihood of increased macroeconomic imbalances and the uncertainty associated with capital account liberalisation argue for caution in interest rate setting,” the central bank said in a statement.
The central bank’s monetary policy in the coming term will depend on economic developments and the success of the capital account liberalisation process, it said.
The central bank cut its key deposit rate in August, citing an improved inflation outlook, after 10 months of keeping the rate unchanged.
The inflation outlook is unlikely to have changed from the previous forecast by the central bank in August , it said. (Reporting by Stockholm and Copenhagen)