Interest Rate in Norway
Norway - Interest Rate
Norges Bank hikes interest rate on 21 March and points to another increase within six months
Norges Bank hiked the sight deposit rate to 1.00% at its 21 March monetary policy meeting from 0.75%, where it had been since 21 September last year. Although the decision was broadly in line with market analyst expectations, the Bank unexpectedly gave a strong signal that it would hike the deposit rate again within six months, which immediately caused the krone to strengthen after the announcement. This comes at a time when other monetary policy institutions around the world are resisting fresh hawkish moves in the short-term, such as the U.S. Federal Reserve and the European Central Bank.
The interest rate move on 21 March was driven by above-target inflation, with inflation in February at 3.0%, which was above Norges Bank’s 2.0% target for the eighth consecutive month. At its meeting, the Central Bank raised its inflation forecast for 2019 to 2.3%, which is substantially higher than the previous 1.8% projection. In addition, Norges Bank said the economy “appears to be stronger than anticipated earlier” and raised its economic growth projection for 2019 to 2.4% from 2.0%. Meanwhile, Norges Bank noted that rising global protectionism and political uncertainty, including that related to the UK’s exit from the EU, threaten monetary policy tightening in the future.
All told, the forward-looking takeaway is that the sight deposit rate “will most likely be increased further in the course of the next half-year”, according to Norges Bank, with a “somewhat lower policy rate further out” than previously forecast. The next monetary policy decision will be taken on 9 May.
Norway Interest Rate Forecast
Met the why particular Consensus Forecast panelists expect the key policy rate to end 2019 at 1.23%. For 2020, panelists project the rate to end the year higher at 1.57%.
Norway - Interest Rate Data
|Policy Interest Rate (%)||1.50||1.25||0.75||0.50||0.50|
5 years of economic forecasts for more than 30 economic indicators.
Norway Interest Rate Chart
Source: Norway Central Bank.
|Bond Yield||1.78||-0.65 %||Jan 30|
|Exchange Rate||8.43||-0.38 %||Jan 30|
|Stock Market||835||-0.08 %||Jan 30|
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April 11, 2019
Consumer prices rose 0.2% in March compared to the previous month, down from the 0.8% increase in February.
April 9, 2019
According to monthly GDP data released by Statistics Norway, total economic output decreased 0.4% in February compared to the previous month in seasonally-adjusted terms, contrasting January’s 0.2% increase.
April 5, 2019
Industrial production fell a seasonally-adjusted 1.8% in February compared to the previous month, slightly less than the 2.2% fall in January, according to Statistics Norway.
Norway: Norges Bank hikes interest rate on 21 March and points to another increase within six months
March 21, 2019
Norges Bank hiked the sight deposit rate to 1.00% at its 21 March monetary policy meeting from 0.75%, where it had been since 21 September last year.
March 11, 2019
Consumer prices rose 0.8% in February compared to the previous month, contrasting the 0.5% fall in January.