The current account deficit measured 120.3 b.kr. in Q2/2026, or 9.3% of GDP. The balance on goods trade was negative by 154.4 b.kr., but the balance on services trade was positive by 66.6 b.kr. The deficit on primary income was 18.0 b.kr., and the deficit on secondary income was 14.5 b.kr. Iceland’s net international investment position (NIIP) improved by 6.8% of GDP between quarters and is therefore positive by 46.9% of GDP.

Minutes of the MPC meeting of 17-18 August 2026 have been published. At that meeting, the Committee discussed economic and financial market developments, decisions on the application of the Bank’s monetary policy instruments, and the communication of those decisions on 19 August.

The Central Bank of Iceland has begun publishing data on the domestic commercial banks’ foreign exchange transactions with the Icelandic króna. The data show monthly turnover in the foreign exchange market, including both purchases and sales of Icelandic krónur in exchange for foreign currency in spot transactions.

The Central Bank conducts quarterly lending surveys among the four commercial banks. According to the responses, the supply of mortgage loans to households increased marginally over the past three months, and the banks expect a slight increase in the coming six months. Demand for motor vehicle loans grew marginally in the past three months, but is expected to taper off slightly in the six months ahead.

Monetary Bulletin provides a quarterly overview of monetary developments and prospects, including an inflation forecast, which plays an important role in the formulation of monetary policy.

The Monetary Policy Committee (MPC) of the Central Bank of Iceland has decided to raise the Bank’s interest rates by 0.25 percentage points. The Bank’s key interest rate – the rate on seven-day term deposits – will therefore be 8.00%. Four Committee members voted in favour of the decision, while one voted to keep rates unchanged.

A statement of the Monetary Policy Committee will be published on the Central Bank of Iceland website, Wednesday August 19th, at 08:30 hrs. Monetary Bulletin will be published on the website at 08:35 and at 9:30 hrs., a press conference on the statement and the contents of the Monetary Bulletin will be held.

The Central Bank of Iceland conducted a survey of market agents’ expectations over the period from 10-12 August. A total of 38 agents in the bond market, including banks, pension funds, mutual and investment funds, securities brokers, licensed asset management firms, and insurance firms were invited to participate. Responses were received from 24 market participants, giving a response rate of 63%. The survey results indicate that market agents expect inflation to be higher in 2026 than they did in the May survey.

The International Monetary Fund's annual report on the Icelandic economy was published today on the Fund's website. Regular assessments of the state of and outlook for the economies of member countries are conducted under Article IV of the IMF's Articles of Agreement (Article IV Consultation). An IMF mission held meetings with the Icelandic authorities and various stakeholders in June.

The Central Bank of Iceland has published the working paper "Too Little, Too Late? Testing The Optimality of Monetary Policy in Iceland" by Birta B. Haraldsdóttir and Bjarni G. Einarsson, economists in the department of Economics and Monetary Policy.