Norway: Norges Bank stays on hold as expected
September 19, 2013
At its 19 September monetary policy meeting, Norges Bank (NB) decided to maintain the sight deposit rate unchanged at 1.50%, in a move expected by market analysts. The decision represents the ninth consecutive meeting in which the Central Bank decided to keep the key policy rate unchanged.
The Bank stated that although economic activity remains solid in Norway, it has slowed more than previously expected. Growth in advanced economies is showing positive signs, while economic activity in emerging market economies slowed down. In recent weeks, the krone recovered some of ground it had lost since mid-June. According to Central Bank Governor Oystein Olsen, the first increase in the key policy rate is projected to take place in summer of next year, "unless the Norwegian economy is exposed to new major shocks".
Regarding price developments, the Bank stated that inflation is higher than expected and that it will remain just below 2.5% in the coming years. The next monetary policy meeting is scheduled for 24 October.
FocusEconomics Consensus Forecast panelists expect the sight deposit rate to remain stable by the end of this year, resulting in an average of 1.48%. In 2014, the panel sees the key policy rate rising to 1.81%.