The central bank of Iceland lowered the interest rate to 9.50% in Januaryfrom both prior and anticipated readings of 10.00%.

The bank reiterated its forecasts for the economy for 2010. Growth is predicted to reach -3.4% from prior expectations of -2.4%, while unemployment will probably drop to 9.5% from 9.8%. With regard to inflation, the rate is to decline to 5.6% from 6.1%.