Central Bank of Iceland's monetary policy committee reduced its interest rate by 0.25 percentage points on Dec. 14, cutting its seven-day term deposit rate to 5%.

In explaining its decision, the central bank said the composition of GDP growth, with exports and business investment weighing more heavily than anticipated, is better than was expected in November, and it highlighted that the exchange rate for the Icelandic krona is already above the projected average for 2017.

As of Dec. 14, US$1 was equivalent to 112.64 Icelandic kronur.