Norway: Norges Bank stays put in June
June 20, 2013
At its 20 June 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 eight consecutive meeting in which the Central Bank decides to keep the key policy rate unchanged. The Bank acknowledged that growth among Norway's main trading partners came in lower than expected, as the downturn in the Eurozone is likely to persist longer than previously projected while prospects for the United States deteriorated amid tax increases and expenditure cuts. In Norway, economic activity weakened slightly, while the krone depreciated in recent months. According to Central Bank Governor Oystein Olsen, the first increase in the key policy rate is projected to take place in the year ahead, "unless the Norwegian economy was exposed to new major shocks". Furthermore, Olsen affirmed that "given the vulnerabilities in the Norwegian economy and solid earnings in the financial sector, banks should now build a countercyclical capital buffer". Regarding price developments, the Bank stated that inflation has been slightly higher than anticipated in the March report. The next monetary policy meeting is scheduled for 19 September.