Ice­land raises rates as econ­omy heats up un­der krona curbs

The Pak Banker - - FRONT PAGE -

LON­DON: Ice­land's cen­tral bank raised its bench­mark in­ter­est rate for a sec­ond time since June as it moves to counter the threat of over­heat­ing af­ter seven years of cap­i­tal con­trols. The col­lat­eral lend­ing rate was raised to 6.25 per­cent from 5.75 per­cent, the Reyk­javik-based len­der said on Wed­nes­day. The de­ci­sion fol­lows a 50 ba­sis-point in­crease in June. Ice­land is try­ing to pre­vent im­bal­ances in its econ­omy, which has ex­isted in­side cap­i­tal con­trols since its fi­nan­cial sys­tem col­lapsed at the end of 2008.

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