Central Bank of Norway

March 17, 2016

The Executive Board of Norges Bank cut Norway’s policy interest rate by another 25 basis points to a record low of 0.50% and released a statement suggesting the rate could drop eventually to zero if needed.  From a post-Great Recession high of 2.25%, the rate was lowered by 50 bps in December 2011 and then five times more by 25 bps (in March and December of 2014, June and September of 2015, and March 2016).  Norway, an energy producer and exporter, has seen a deterioration of the economic outlook, and moderating wage and price pressures are expected despite krone depreciation.  The statement recognizes the danger to domestic financial markets of ultra-low central bank interest rates, and the statement promises to proceed with greater caution in the future when considering more stimulus.

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

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