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 7.75%. All Committee members voted in favour of the decision.

A statement of the Monetary Policy Committee will be published on the Central Bank of Iceland website, Wednesday 20 May, 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 survey results indicate that market agents expect higher inflation in the coming year than they did in the January survey; however, they expect inflation to ease relatively quickly at the start of next year. Furthermore, they expect the exchange rate of the króna against the euro to be about the same in one year as it was when the survey was conducted.

The Central Bank of Iceland has decided to resume regular foreign currency purchases in the interbank foreign exchange market. More specifically, the Bank intends to purchase 6 million euros per week.