25-03-2008
Iceland unexpectedly raises interest rates
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
The Republic of Iceland has taken the unexpected decision to significantly raise interest rates.
According to reports by Reuters, the country has today (March 25th) opted to increase interest rates to 15 per cent, a rise of 125 basis points. "They were in a bit of a strange situation with the crown going completely amuck in the last week and they say that the inflation outlook is higher [but] people probably didn't expect a rate hike of 125 basis points," said Elisabeth Andreew, a representative from Nordea in Copenhagen.
Indeed, Iceland's central bank confirmed the need to reverse the decline in the value of the country's currency, the Icelandic crown. At the start of trading today, the value of the crown increased by over two per cent in local markets, against both the US dollar and the euro.
Headquartered in Stockholm, Nordea is a financial services group, with markets across northern Europe.