October 2, 2019 / 9:37 AM / 16 days ago

UPDATE 1-Iceland's central bank cuts key interest rate to record low

(Adds background, inflation, statement from central bank)

COPENHAGEN, Oct 2 (Reuters) - Iceland’s central bank on Wednesday cut its main deposit rate to a record low, saying an uncertain outlook for the global economy meant growth could slow more than is forecast.

The bank, which appointed Asgeir Jonsson as governor in July, lowered the rate by 25 basis points to 3.25%, as expected, following cuts in May, June and August.

“Leading indicators imply that economic activity will continue to slow, although there are signs that the economy may be regaining a foothold,” the bank said in a statement.

Iceland’s economy has grown in recent years, but a slowdown in tourism and a failed fishing season this year have clouded the country’s outlook.

The bank said Iceland’s currency, the króna, had strengthened and inflation expectations had diminished since its last policy meeting, in August, leading to a tighter monetary stance.

Inflation in the third quarter of this year was 3.1%, above its 2,5% target.

Reporting by Nikolaj Skydsgaard, Jacob Gronholt-Pedersen and Stine Jacobsen; editing by Larry King

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