Bank of Norway

October 27, 2016

Norway’s main central bank interest rate will remain at a record low of 0.50%, the level since a 25-basis point reduction last March. The rate had also been reduced by 50 basis points in both 2014 and 2015. Today’s released statement from the central bank Executive Board is somewhat less dovish than the one following the prior meeting of September 22.

DeletedĀ from the latest statement is the following passage contained in the prior one.

The analyses in this Report suggest that the key policy rate will remain close to Ā½ percent in the next few years. At the same time, the key policy rate forecast implies a slightly higher probability of a decrease than an increase in the key policy rate in the year ahead.

Instead, the more recent statement observes the market expectations of other central bank future rate paths have drifted a bit higher. Officials also note a rise in oil prices and property price inflation. Norwegian economic developments are not far from what was assumed before, and the statement merely concludes that the gestalt of information justified keeping the key rate unchanged without any indication of the direction of the next move.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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