Iceland­ic Eco­nom­ic Weekly: 9 May 2022

The MPC raised the policy rate by 1 percentage point last week. The CBI’s key interest rate (seven-day term deposits) is now 3.75%.

Last week’s highlights

• The MPC raised the policy rate by 1 percentage point  last week. The CBI’s key interest rate (seven-day term deposits) is now 3.75%. The MPC has raised interest rates by a total of 3 percentage points since it began the current rate hike cycle in May of last year. The decision was in line with our expectations.
• Concurrent with the interest rate decision, the CBI published its quarterly Monetary Bulletin. The CBI now expects over 8% inflation in both Q2 and Q3 of the year. This is significantly higher than in its last forecast in February.

The week ahead

• On Tuesday, the Directorate of Labour releases unemployment numbers and the Icelandic Tourist Board publishes departures from Keflavík International Airport.

Markets and Economic Overview

Icelandic Economic Weekly: 9 May 2022 (PDF)