For some time, the Central Bank of Iceland has been examining the possibility of calculating and publishing interest rates based on Icelandic Treasury bond yields. On the basis of this work, the Bank has now decided to begin publishing constant maturity rates, beginning today. From now on, the Bank will publish these rates by 11:00 hrs. each business day.
Constant maturity rates show interpolated interest rates on indexed and nominal Icelandic Treasury bonds based on constant maturities of three, five, and ten years. Two types of annualised rates will be published:
1. A daily par yield curve rate showing the interest rate and yield that new coupon bonds with three-, five-, and ten-year maturities would bear if issued at par (i.e., at a price of 100) on that day. This rate shows the Icelandic Treasury’s actual funding cost for selected maturities each day; i.e., equivalent to the Constant Maturity Treasury (CMT) rate.
2. Zero-coupon interest rates show what the yield on a new zero-coupon Treasury bond would be if it were issued that day. This rate can be used, among other things, to calculate the present value of future payment flows.
The above-specified interest rates are not rates on Icelandic Treasury bonds actually issued; instead, they show the interpolated interest rate on Treasury bonds – coupon bonds and zero-coupon bonds – at a given constant maturity, based on issued Icelandic Treasury bonds that are listed on the OMX Iceland exchange. The official publication of these interest rates may, among other things, be useful to financial market participants, analysts, and the Treasury. It contributes in a neutral and standardised way to greater transparency, as well as improved comparison and pricing of Icelandic financial instruments.
There are various ways to calculate constant maturity rates, as they must be based on an interpolation between yields on issued bonds with various maturity dates. The Central Bank applies a new methodology comparable to that used to calculate the same type of rates published abroad. Further information on constant maturity rates and technical details can be found on the Central Bank’s website, under the section Constant maturity rates: Vextir (Icelandic)
Data on interest rates extending several years back in time will be published in the near future.
Inquiries may be sent to fjolmidlar@sedlabanki.is
Press release no. 16/2025
7 November 2025