Iceland cuts rates on weaker growth forecasts
A reduction in key tourism sector may be worse than previously thought
The Central Bank of Iceland cut interest rates by 25 basis points to 3.75% today (June 26) on lower growth expectations.
The monetary policy committee followed up on the 50bp rate cut it carried out on May 22. Rate-setters say “a contraction in the domestic economy is still anticipated and is expected to show more clearly in coming months”.
This will especially impact the tourism sector, one of the key engines of growth, which may be suffering a decline that is “deeper than previously expected
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