if you thought our interest rates are high

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    Iceland raises interest rate to 15.5%10/04/2008 08:59PM AEST The central bank of Iceland has raised the country's key interest rate by 0.50 points to 15.5 per cent, the second hike in two weeks.

    In an unexpected move on March 25 the central bank raised the interest rate by 1.25 points to 15 per cent, saying "inflation has been higher than forecast and inflation expectations have risen," compared to its forecast in November.

    While the bank's inflation target is 2.5 per cent, it is allowed to deviate by 1.5 percentage points in either direction. The February inflation rate was at 6.8 per cent, and in March was at 8.7 per cent.

    The North Atlantic nation's currency, the krona, has slumped and made imported goods more costly.

    Iceland has in recent years been among the fastest-growing economies in the world.
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