http://www.bloomberg.com/news/2013-08-21/iceland-keeps-western-europe-s-highest-rate-as-inflation-slows.html
Iceland’s central bank kept its benchmark interest rate unchanged for a sixth consecutive meeting after intervening in the currency market and predicted it will take longer to tame inflation.
The seven-day collateral lending rate was kept at 6 percent, the highest in western Europe, according to a statement on the website of the Reykjavik-based Sedlabanki.
“The central bank’s foreign exchange market strategy, introduced in May, has contributed to reduced exchange rate fluctuations, and the krona has remained relatively stable,” the bank said. “As yet, however, this development has not led to lower inflation expectations.”
Iceland suspended foreign currency purchases designed to build up reserves at the beginning of the year and in February announced it would instead buy kronur to take pressure off rates. Policy makers are seeking to protect the currency from losses as they try to phase out capital controls in place since the island’s 2008 economic meltdown.
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