Norwegian Monetary Policy Remains Unchanged after Latest Executive Board Meeting
August 29, 2012
Analysts had not expected Norway’s policy interest rate of 1.5% since March to be changed today, and it wasn’t. A statement from the Norges Bank strikes an upbeat tone and claims that
Developments in both Norway and among trading partners have been broadly in line with expectations. Inflation in Norway has been slightly lower than projected and the krone has recently appreciated somewhat. The expected upward shift in interest rates abroad has been deferred further ahead.
The statement reaffirms that a rate change is unlikely during the balance of 2012. During the Great Recession, the policy rate was slashed from 5.75% prior to October 2008 to 1.25% by mid-2009. Four hikes of 25 basis points apiece were implemented in October 2009, December 2009, May 2010, and May 2011. From the recovery high of 2.25%, the rate was cut more recently to 1.75% last December and then to 1.5% in March of this year.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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