Iceland's central bank on Wednesday held its key policy interest rate unchanged at 9.25%.

"Inflation eased slightly in February, to 6.6%. Underlying inflation has also eased but, like headline inflation, is well above the inflation target," it said in a statement.

"Inflation expectations are also above target, which could indicate that inflation will remain persistent," it said. (Reporting by Terje Solsvik, editing by Anna Ringstrom)