Iceland's Finance Minister Urges Rate Cuts as Krona Controls End
- Central bank keeps rates unchanged on growing demand pressures
- Bank says will ‘mitigate’ short-term krona volatility
Iceland Finance Minister Not Comfortable With Krona Moves
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Iceland’s central bank should cut interest rates again to relieve pressure on the krona in conjunction with the dismantling of the capital controls, the nation’s finance minister said.
With controls gone and the labor markets calm, it’s set up for the central bank to reduce interest rates “somewhat,” Finance Minister Benedikt Johannesson said, adding that he of course has no “influence” over such a decision. The government has taken steps to reduce pressure on the economy to avoid an overheating, in part by increasing budget surpluses, he said in an interview on Bloomberg TV.