हामी सबैकाे संसारन्यूज

9 Nov, REYKJAVIK- Iceland’s central bank raised its key interest rate on Wednesday to stem inflation, citing stronger-than-expected economic growth 10 years after a banking crisis that rocked the small nation.
The 0.25 point increase, the first hike since November 2015, brought the interest rate to 4.5 percent.
The decision illustrates Iceland’s economic turnaround since the 2008 financial crisis that erupted in the wake of US investment bank Lehman Brothers’ bankruptcy.
Iceland’s financial sector crumbled after the collapse of the three biggest banks, which had assets more than 10 times the size of the nation’s gross domestic product.
Iceland became the first Western country since Britain in 1976 to receive a bailout from the International Monetary Fund.
Ten years later, the situation is completely different.
While the central bank said it anticipated growth to slow in the second half of the year, nonetheless the economy is expected to expand by 4.4 percent this year, almost a point higher than it forecast in August.
“The outlook is for inflation to continue rising and be somewhat above the target next year,” the bank said in a statement.
“Higher inflation and inflation expectations in recent months have lowered the central bank’s real rate more than is desirable in view of current economic developments and prospects,” it said.
In October, the inflation rate was 2.8 percent.
The bank, which has an inflation target of close to 2.25 percent, said it was ready to further tighten its monetary policy to contain rising prices.
The bank gradually began hiking its interest rate as of August 2011, but has cut it on several occasions since then.