Iceland Interest Rate

Last Release

Feb 05, 2025

Actual

Units In

8.5

Frequency

Daily

Next Release

N/A

Time to Release

N/A

Highest	Lowest	Average	Date Range	Source
18 Oct 2008	0.75 Nov 2020	6.81 %	1998-2025	Central Bank of Iceland

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.

Latest Updates

Iceland’s Central Bank cut its key interest rate by 50 bps to 8.0%, aligning with market expectations, after inflation fell to 4.6% in January, with underlying inflation at its lowest in three years. Policymakers added that further disinflation is anticipated in the coming months. Meanwhile, economic growth has slowed due to tight monetary policy, narrowing the positive output gap. The housing market has cooled, with slower price increases. However, economic activity appears stronger than early estimates suggested, and wage costs continue to rise. Looking ahead, the central bank said future policy decisions will be guided by economic activity, inflation trends, and expectations.