Norway skyline at night

Norway Monetary Policy October 2019

Norway: Norges Bank holds firm in October and gives no hint of budging

The Executive Board of Norges Bank unanimously decided to keep the sight deposit rate at 1.50% at its monetary policy meeting on 23 October. The decision met market expectations after the Bank raised rates at its previous meeting in September and previously stated the policy rate “will most likely remain at this level in the coming period”.

October’s decision came against a backdrop of inflationary pressures that were broadly in line with the Bank’s previous projections: Inflation eased marginally to 1.5% in September from 1.6% in August, suppressed by lower energy prices and remaining slightly below the Bank’s 2.0% target rate. That said, the weakness in the krone in recent months will likely push inflation closer to the Bank’s target rate. Meanwhile, the domestic economy continues to perform well as a tight labor market and strong investment support domestic demand—adding further upward pressure to prices. In addition, household debt growth proved lower than the Bank had expected, while developments in housing prices were more or less as expected, allowing the Bank to hold keep rates steady.

The Bank’s decision to hold rates steady comes amid low interest rates abroad, heightened trade protectionism and persistent global uncertainty. Shifting focus to 2020, the Bank’s stance was virtually unchanged and again noted “the key policy rate will most likely remain at the present level in the coming period”. The Norwegian economy is expected to gain momentum and the capacity utilization rate is still believed to be above its long-run average, although increasing risks to the global growth outlook could further delay another deposit rate increase.

The next monetary policy decision will be taken on 19 December.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest