Norwegian Policy Interest Rate Left at 2.0%, 75 Basis Points Above Cyclical Low

August 11, 2010

Moderate growth and sightly sub-target inflation give Norway’s monetary authorities leeway to normalize interest rates at a gradual pace.  That’s the essential message of a statement released today after the policy rate was left at 2.0% for the second consecutive meeting.  The trough of 1.25% was maintained from June 2009 until October 2009.  The rate was then lifted by 25 bps each on October 28, December 16 and May 6, 2010.  When recession hit the world economy, the rate was cut seven times by a total of 450 basis points from 5.75% to 1.25%: twice by 50 bps each in October 2008, by 175 bps in December 2008, by 50 bps each in February, March and May of 2009 and one final time by 25 bps in June 2009. 

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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