Norwegian Central Bank Rate Cut By 50 Basis Points to 1.5%

May 6, 2009

Norges Bank officials have implemented their sixth rate reduction since October 15th.  The 50-bp size of the move was as analysts had forecast.  Five of the six cuts were by 50 bps, the exception being a mega-175 basis point cut in mid-December.  A brief statement from monetary officials makes no reference to possible future policy moves but defends today’s action on the grounds that inflation will be continuing to fall and likely will drop under target as economic activity contracts in Norway and elsewhere.  Norway’s benchmark interest rate is now 425 basis points below the prior cyclical peak of 5.75%.

Copyright 2009 Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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