The Central Bank of Iceland slashed its rate on seven-day term deposits by 75bps to 1.0 percent during its May meeting, and stopped offering 30-day term deposits aiming to boost liquidity in circulation and further strengthen monetary policy transmission. The central bank sees the economy contracting by 8 percent this year amid an expected plunge in tourist visits due to the coronavirus crisis, and the unemployment rate to reach 12 percent in the third quarter. Still, policymakers noted that economic developments will depend on the path the pandemic takes and the progress made in unwinding the associated public health measures. The MPC also pledged to use the tools at its disposal to support the domestic economy and ensure that the more accommodative monetary stance is transmitted normally to households and businesses.

Interest Rate in Iceland averaged 7.23 percent from 1998 until 2020, reaching an all time high of 18 percent in October of 2008 and a record low of 1 percent in May of 2020. This page provides - Iceland Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Iceland Interest Rate - data, historical chart, forecasts and calendar of releases - was last updated on May of 2020. source: Central Bank of Iceland

Interest Rate in Iceland is expected to be 1.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Iceland to stand at 1.00 in 12 months time. In the long-term, the Iceland Interest Rate is projected to trend around 1.75 percent in 2021 and 2.50 percent in 2022, according to our econometric models.

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Iceland Interest Rate

Actual Previous Highest Lowest Dates Unit Frequency
1.00 1.75 18.00 1.00 1998 - 2020 percent Daily


Calendar GMT Actual Previous Consensus TEForecast
2020-02-05 08:55 AM CBI Interest Rate Decision 2.75% 3% 3%
2020-03-11 08:00 AM CBI Interest Rate Decision 2.5% 2.75%
2020-03-18 08:00 AM CBI Interest Rate Decision 1.75% 2.5%
2020-05-20 08:55 AM CBI Interest Rate Decision 1% 1.75% 1.5%
2020-08-26 08:55 AM CBI Interest Rate Decision 1% 1%
2020-08-26 09:00 AM Monetary Bulletin
2020-09-16 09:00 AM Financial Stability Report
2020-10-07 08:55 AM CBI Interest Rate Decision 1%


News Stream
Iceland Cuts Key Interest Rate by 75bps
The Central Bank of Iceland slashed its rate on seven-day term deposits by 75bps to 1.0 percent during its May meeting, and stopped offering 30-day term deposits aiming to boost liquidity in circulation and further strengthen monetary policy transmission. The central bank sees the economy contracting by 8 percent this year amid an expected plunge in tourist visits due to the coronavirus crisis, and the unemployment rate to reach 12 percent in the third quarter. Still, policymakers noted that economic developments will depend on the path the pandemic takes and the progress made in unwinding the associated public health measures. The MPC also pledged to use the tools at its disposal to support the domestic economy and ensure that the more accommodative monetary stance is transmitted normally to households and businesses.
2020-05-20
Iceland Cuts Rates Unexpectedly
The central bank of Iceland lowered the key Bank interest rate – the rate on seven-day term deposits – by 50bps to 1.75 percent at an unexpected meeting on March 18th 2020. It follows a cut by a similar margin last week and brings borrowing costs to a new record low. The central bank said the spread of the COVID-19 pandemic and measures adopted both in Iceland and abroad in an attempt to slow the spread of the virus have a negative impact on the economic outlook and financial conditions.
2020-03-18
Iceland Slashes Key Rate to 2.25%
The central bank of Iceland lowered the key Bank interest rate – the rate on seven-day term deposits – by 50bps to a record low of 2.25 percent at an unexpected meeting on March 11th 2020. The move aims to support the economy from the impact of the coronavirus, in particular the tourism sector. Central bank Governor Asgeir Jonsson said at a press conference that the Bank would hold additional meetings in the coming days if needed. On Tuesday, the Icelandic government approved an action plan intended to minimise the negative impact of COVID 19.
2020-03-11
Iceland Cuts Key Rate to 2.75%
The central bank of Iceland lowered the key Bank interest rate – the rate on seven-day term deposits - by 25bps to 2.75 percent on February 5th 2020. It is the first rate decline since October, bringing borrowing costs to a record low. Policymakers said the economic outlook for 2020 and 2021 deteriorated and expect a 0.8 percent growth in 2020, below 1.6 percent estimated in November, mainly due to headwinds facing the export sector and tighter financing conditions for domestic firms. At the same time, inflation is seen lower and below the 2.5 percent target for most of the forecast horizon. Yet, the inflation fell to 1.7 percent in January from 2 percent in December.
2020-02-05

Iceland Interest Rate
In Iceland, the benchmark interest rate is set by the board of Governors of the Central Bank of Iceland (Seðlabanki Íslands). The main interest rate is the seven-day term deposit rate since May 2014. Previously the Bank’s key rate was the rate on its collateralised loans to financial institutions, but in the wake of the crisis the interest rate on the Bank’s deposits had greater influence on money market, as demand for Central Bank loans had been limited. Therefore the Bank’s key interest rate is the rate on seven-day term deposits.