Norges Bank

September 22, 2016

Norway’s central bank policy rate has been 0.50% since a 25-basis point cut in March. Norway is one of several economies in which monetary policy began to be tightened in the post-Great Recession economic recovery but had to be rescinded subsequently when the economy did not react well. The last cyclical low of 1.25% lasted only from June 2009 until October 2009. By May 2011, the key rate was back up to 3.25%. There have been six reductions since December 2011. A statement released today observes faster inflation and a slightly faster rate of growth lately. But officials go on to note that “growth in the Norwegian economy is moderate, and capacity utilization is below a normal level. As a result of low cost growth and a somewhat stronger krone, inflation is likely to recede further ahead.” Officials conclude that they do not anticipate raising the interest rate “in the period ahead.”

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

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