No Change

The Central Bank will have no choice but to hold the prime interest rate at 13% for this month.  The kronur is still too weak for further reduction and any lowering will jeopardize the IMF installment in July.  That's just the way it is when you borrow alot of money, especially money from an institution like the IMF; they can, and usually do, tell you what you may and may not do.  They call it a program for a reason, and Iceland has to stick to it, or else do without.

 

GTB

Peningastefnunefnd í klemmu

Athugasemdir

[Axel Þór Kolbeinsson, 3.6.2009 kl. 15:21]

The IMF might give in and allow the Central Bank to lower intrest rates by .5% - 1% due to political pressure, but that's it.

I predict the intrest rates will be lowered to 12.5%

[Axel Þór Kolbeinsson, 4.6.2009 kl. 10:18]

I was close.

http://www.mbl.is/mm/vidskipti/frettir/2009/06/04/vextir_laekkadir_i_12_prosent/

[Gregg Thomas Batson, 4.6.2009 kl. 13:50]

You were really close! It doesn't make any sense to lower only 1%.  Nobody is happy with such a low decrease and the kronur will suffer because of it.  According to the statement from the Central Bank, the kronur is actually being supported by them.  So it is in worse shape than it appears.  I say drop the rate to 5% immediately and get it over with or don't move it at all.

GTB

[Axel Þór Kolbeinsson, 4.6.2009 kl. 14:07]

One thing is sure, and that is that the current monetary policy is not working.  I believe we should drop inflation targeting and adopt some kind of fixed exchange rate, even with allowable float.