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Central Bank of Iceland Keeps Rates Unchanged as Inflation Stays Above Target

BY MT Newswires | ECONOMIC | 10/08/25 10:21 AM EDT

10:21 AM EDT, 10/08/2025 (MT Newswires) -- The Central Bank of Iceland Wednesday said its Monetary Policy Committee (MPC) kept interest rates unchanged, including the key rate on seven-day term deposits at 7.50%.

All MPC members voted in favor of the decision, the central bank said in a statement.

Inflation measured 4.1% year over year in September, after rising by 0.3 percentage point from the previous month.

"Many factors have moved in the right direction, but the conditions that would enable an easing of the real interest rate have not yet emerged. Further interest rate cuts will depend on whether inflation moves closer to the Bank's 2.5% target," the bank said,

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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