Bank of Norway Tightens

June 20, 2019

The last of today’s bonanza of central bank policy announcement was the exception to the dovish predisposition of other monetary authorities. The Bank of Norway as expected raised its policy interest rate by 25 basis points to 1.25%. This was the third tightening move following 25-bp increases last September and March but leaves the rate still a full percentage point under its pre-March 2016 level. In a released statement, the Executive Board asserts that “the policy rate will most likely be increased further in the course of 2019.” Norway is an oil producer and exporter, and its economy has grown faster than expected. Above-normal capacity usage warrants a tighter monetary policy to ensure against above-target core inflation, but officials promise to proceed cautiously given world trade tensions.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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