The policy rates lower today by one percent. The money policy committee of the central bank of Iceland has decided to lower the interests in the credit accounts of deposit institutions by 0,5 percent down to 9%.

In the announcement says that the maximum amount for weekly auctions of balance bonds for 28 days will be increased from 25 billion króna into 30 billion króna with 9,5% minimum interests and 10,25% maximum interests. That includes a 0,25% raise of maximum interests.

It is not only the Icelandic specialists wh expect the policy rates of the central bank of Iceland are going to stay unchanged tomorrow, but also their foreign colleagues are predicting the same. Amongst them is Petter Sandgren director of the new market division of SEB.

"It would surprise me if they would change the policy rates," says Sandgren in a conversation with Reuters. "There are still too many uncertainty factors at hand."

Magnus Arni Skulason who has a seat in the bank council of the Central bank of Iceland on the behalf of the progressive party, contacted a large shareholder of Ossur orthopaedic manufacturer and an employee of the medical company Actavis in order to tell them about a preferable transactor (broker) for foreign currencies. In queston is the English broker company Snyder but the administration of the company are friends with Magnus Arni.

The Prime Minister has appointed Már Guðmundsson in the office of Central Bank Manager for the next 5 years starting from the 20th of August 2009 and Arnór Sighvatsson in the office of Assistant Central Bank Managera for 4 years starting from the 1st of July 2009.

The central bank of Iceland announced that the policy rates are to be lowered from 13 to 12 percent. The decision of the bank will be reasoned at a press conference at 11am.The interests of day loans are also lowered by 1,0 percent but other interest rates of the central bank of Iceland have not been changed.

News Article by noname
Translated by Anya
Original Article in Icelandic

The statement of Franek Rozwadowski, the delegate representative of the International Money Fund, about the limited room of the central bank to reduce the policy rates further has raised great attention this morning. His opinion goes directly against the statement of Svein Harald Oygard from May 7th about large policy rate reductions in June if certain presumptions are fulfilled.

A memo which David Oddsson, former governor of the central bank, wrote after the phone conversation with Geir H. Haarde, former prime minister, last summer is a personal memo of Davids.

The central bank of Iceland has on that reason denied the Frettabladid to have a copy of that memo. David informed in Kastljos on February 24th that he had found this memo while cleaning his desk. That was a memo he wrote after warning the former prime minister about the imminent collapse of the Icelandic bank system.

The new bank council of the Central Bank of Iceland has been set by the Parliament. Two lists were set forward. On the lists were on the other hand the individuals the government parties wanted to have in the council and on the other hand the individuals of the minority. The council was chosen without elections.

New law about the central bank were set in effect on midnight and according to them the positions of the current bank government, including the position of the chairman of the bank council are discontinued. In stead there will only be one central bank governor and assistant bank governor.

The Norwegian newspaper Aftenposten says that it has had it confirmed that a Norwegian has been set temporarily in the office of the central bank governor in Iceland today. The newspaper thinks it is likely that it will be Jarle Bergo, former assistant central bank governor of Norway, who resigned last year after working 12 years for the central bank.

The law expects that there will be one central bank governor set at the central bank and one assistant bank governor. Then there will be founded a money policy committee, which will take decisions about the usage of the control tools of the banks in money matters.

David Oddsson and Eirikur Gudnason central bank governors, called their employees to a meeting this morning and said their goodbyes. Eirikur Gudnason has worked in the bank for 40 years and is a large part of the history of the Central bank.

The meeting was crowded, but short. David Oddsson said that the bill about the changes of the law about the central bank was in third discussion at the parliament so this would be the end of the road, they would be leaving today or tomorrow.