REYKJAVIK — Iceland's central bank lifted its main interest rate on
Wednesday, its second increase in three months, as tourists begin to return and
boost the economic recovery.
اضافة اعلان
The 0.25 percentage point increase took the island nation's key rate to 1.25
percent.
While its peers in the eurozone, Britain and the United States have kept
ultra-low interest rates to boost their economies, Iceland's central bank began
to tighten its monetary policy in May as economic prospects began to improve.
It now expects 4.0 percent growth this year, 0.9 percentage point more than
its May forecast.
"The improvement is driven mainly by tourist arrivals, which have
increased more rapidly this summer than was previously expected," the
central bank's monetary policy committee said in its statement.
Tourism helped drive
Iceland's growth before the pandemic and the sudden
halt in arrivals as countries shut their borders sent the economy into a
tailspin.
The central bank said inflation appeared to be moderating, but warned that
the path the pandemic will take remains unclear and that temporary supply chain
disruptions could still strike.
It said unemployment had fallen faster than expected and the slack in the
economy narrowed more quickly.
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