Már Guðmundsson: Monetary policy - achievements and challenges

Keynote speech by Mr Már Guðmundsson, Governor of the Central Bank of Iceland, at the Monetary Policy meeting of the Icelandic Chamber of Commerce, Reykjavík, 16 November 2017.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Madame Chairman, honoured guests,

Once again, we gather here at the Iceland Chamber of Commerce's monetary policy meeting, which for years has been held after the Central Bank has published its autumn forecast and, in latter years, the Monetary Policy Committee's interest rate decision. I would like to thank the Chamber of Commerce for continuing this tradition and for giving me the opportunity to talk to you about monetary policy. 

In my speech at this same meeting last year, I noted that the Icelandic economy had seldom been stronger, as we were experiencing the combined effects of robust GDP growth, full employment, large rises in real wages, below-target inflation, a current account surplus, a strong international investment position, and lower private sector debt than had been seen in years. At that time, we had also achieved a historical milestone in bringing inflation expectations back to target by most measures. The outlook was positive as well, with the prospect of continued strong GDP growth, a current account surplus, and target-level inflation throughout the forecast horizon.