Iceland's central bank Wednesday raised its key interest rate by a quarter of a percentage point to 4.50 per cent, citing rising inflation, according to dpa. Inflation in July was at 5 per cent compared to the central bank's goal of 2.5 per cent, the bank said. The rise in consumer prices was attributed to a weak krona as well as rising house and oil prices. In its outlook and based on the current exchange rate, the central bank estimated that inflation would continue to rise "well into next year." In February, the Sedlabanki lowered the rate to 4.25 per cent. In the wake of the global financial crisis in 2008, when three of the country's main banks collapsed, the rate was at a high of 18 per cent.
