Bank of Norway
June 22, 2023
In spite of the Fed’s example of pausing for awhile to assess the uncertain effects of higher interest rates on growth and inflation, several other central banks raised rates today. One of these was the Bank of Norway. Analysts were not surprised by the tightening but had been expecting an increase of 25 basis points, not the half percentage point jump to 3.75% that was announced.
The Committee judges that a higher policy rate than previously signalled is needed to bring inflation down to target. Inflation has been markedly higher than projected in the March Report. International interest rates have risen more than anticipated. Higher wage growth and a weaker krone than projected earlier will push up inflation ahead.
Norway’s interest rate hike was the third this year, totaling 100 basis points in all and following 225 basis points of hikes during 2022. Before that two 25-bp increase late in 2021 had lifted the rate from the zero percent level that had prevailed most of that year.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Norway
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