Iceland holds Western Europe’s highest rate at 9.25% on inflation

Reykjav k: Iceland s central bank kept interest rates unchanged for a sixth meeting in a row as western Europe s highest borrowing costs have yet to t...

Reykjavík: Iceland’s central bank kept interest rates unchanged for a sixth meeting in a row as western Europe’s highest borrowing costs have yet to tame inflation on the Atlantic island.

Policymakers at Sedlabanki left the 7-day term deposit rate at 9.25% on Wednesday, as forecast by the nation’s largest banks and the central bank’s own survey of market participants.

The key rate has been held at a 14-year high since August last year.

“The general trend of cooling is very clear,” but “things are not going as fast as we would like,” Governor Asgeir Jonsson said in an interview after the announcement, without ruling out a rate cut before the year-end.

The krona weakened against the euro and the dollar after the announcement, trading 0.4% lower versus the euro at 152.70 at 12:37 p.m. in Reykjavik.