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.

The report of the Monetary Policy Committee of the Central Bank of Iceland to Parliament on the Committee’s work during the first half of 2026 has been published. Extensive supplementary material is included with the report. The report covers the Monetary Policy Committee's decisions on the application of monetary policy instruments and inflation developments during the period from January to June 2026.

At its meeting of 1 and 2 June 2026, the Committee was given a presentation on developments and prospects for the economy and for financial stability. The Committee decided to hold the countercyclical buffer unchanged at 2.5% of domestic exposures. The Committee made also a decision systemically important infrastructure.

The Central Bank of Iceland has signed an agreement with the ECB for Iceland to join the Eurosystem’s TARGET Instant Payment Settlement system (TIPS). This will allow payments in Icelandic krónur to be settled instantly, in central bank money, as of 2028.

The Icelandic króna will be the fifth currency available in TIPS. The other currencies are the euro, the Swedish krona, the Danish krone and, effective in 2028, the Norwegian krone.