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Bloomberg - 10/28/08
The IMF deal is due to be presented to the fund's executive board later this week. One of the conditions attached to the loan was that policy makers raise the key rate to 18 percent, the central bank said in a statement on its Web site today.
Central bank Governor David Oddsson told reporters today he hopes rates ``don't stay at the current level for too long. This decision doesn't necessarily mean that we assume that rates will rise further.'' The bank holds its next rate setting meeting on Nov. 6.
Still, the central bank will continue to ``review the matter,'' he said. The benchmark rate hasn't been higher since the central bank introduced inflation targeting in 2001. Policy makers target price gains of 2.5 percent. Inflation was 15.9 percent in October, Statistics Iceland said yesterday.
The central bank has been holding daily auctions since the currency's collapse earlier this month with local market makers setting the rate at about 150 kronur per euro. According to Roed- Frederiksen, further rate increases can't be ruled out if policy makers want to strengthen the krona once international traders are granted access to the market.
Central bank Governor David Oddsson told reporters today he hopes rates ``don't stay at the current level for too long. This decision doesn't necessarily mean that we assume that rates will rise further.'' The bank holds its next rate setting meeting on Nov. 6.
Still, the central bank will continue to ``review the matter,'' he said. The benchmark rate hasn't been higher since the central bank introduced inflation targeting in 2001. Policy makers target price gains of 2.5 percent. Inflation was 15.9 percent in October, Statistics Iceland said yesterday.
The central bank has been holding daily auctions since the currency's collapse earlier this month with local market makers setting the rate at about 150 kronur per euro. According to Roed- Frederiksen, further rate increases can't be ruled out if policy makers want to strengthen the krona once international traders are granted access to the market.