Bank of Norway and Swiss National Bank
December 15, 2022
A 25-basis point hike of the Bank of Norway‘s policy interest rate to 2.75% matches November’s incremental tightening and brings the rate level to its highest level since February 2009. Rate normalization began in September 2021 from a level of zero percent. More increases are highly probable, as inflation has been higher than imagined earlier and is now expected to remain elevated for a longer duration. “The forecasts for the Norwegian economy are more uncertain than normal, but if the economy evolves as anticipated, the policy rate will be around 3 percent next year”, says Governor Ida Wolden Bache.”
At the Swiss National Bank, monetary policy is reviews quarterly. The policy interest rate had been at -0.75% from January 2015 to June 2022. Today’s 50-basis point rate hike lifts the level to 1.0%. More hikes will be needed, and officials also reaffirmed their foreign exchange policy which allows for discretionary intervention to counter excessive strength in the Swiss franc. They expect inflation to dip only temporarily below the 2% target and to climb back above such by the third quarter of 2025. A released statement updates projected inflation to show a higher path than indicated at the September review from next summer onward.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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