A Norwegian Rate Cut
March 15, 2012
The central bank Executive Board’s policy interest rate was reduced 25 basis points on Wednesday to 1.5%, putting such just 25 basis points above the cyclical low from June to October 2009 and 75 bps below the level from May to December of last year. A statement on the Norges Bank said this third cut since December is warranted because of low inflation and weaker growth prospects stemming from the “continuing downturn abroad and the strong krone.” Officials go on to say that “the current outlook suggests that the key policy rate may remain low longer than projected earlier” and suggest that the next rate change could be either upward or downward depending upon how areas of uncertainty related to the debt crisis, krone, and inflation evolve. May 10 is the next scheduled policy meeting and press conference.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.