Icelandic central bank leaves key interest rate at 5 percent

The central bank estimates 2016 economic growth at 6 percent, above the 5 percent forecast in November. It expects growth to "remain rapid," at 5.33 percent in 2017 and 2.5 to 3 percent in 2018 and 2019. "Rapid growth in economic activity and clear signs of growing demand pressures in the economy call for a tight monetary stance to ensure medium-term price stability," the central bank said in a statement. The central bank cut its key deposit rate in December by 0.25 percentage points in a bid to weaken Iceland's currency. The inflation outlook is unlikely to have changed from the previous forecast by the central bank in August, it said. (Reuters)



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