Interest Rate in Norway
Norway - Interest Rate
Norges Bank keeps rate unchanged in December despite accelerating inflation
In line with market analysts’ expectations, Norges Bank announced on 13 December that it was keeping the sight deposit rate unchanged at 0.75%. Two monetary policy meetings earlier, on 25 September, the Bank hiked this key interest rate for the first time in eight years due to reduce runaway inflation risks.
Inflation has been on the rise lately, with the headline rate reaching 3.5% in November, up from October’s 3.1%. This is the highest rate since December 2016 and well above above Norges Bank’s 2.0% target. Moreover, economic growth has remained robust recently, although it did slow in the August–October period (the latest period for which GDP data is available). In addition to these two trends, which, taken together, would normally make the Central Bank lean towards further rate rises, Norges Bank also noted that interest rates have been low for “a long time”, meaning inflation could accelerate and financial imbalances increase if they remain low for much longer. However, Norges Bank also stated that raising rates too quickly could stifle economic growth, lead to higher unemployment and overly weaken inflation pressures. Moreover, it said persistent global trade protectionism and uncertainty related to Brexit cloud economic prospects for Norway.
All in all, Governor Øystein Olsen said that “our current assessment of the [economic] outlook and the balance of risks suggest that the policy rate will most likely be raised in March 2019”. The next monetary policy decision will be taken on 24 January.
FocusEconomics Consensus Forecast panelists expect the key policy rate to end 2019 at 1.24%. For 2020, panelists project the rate to end the year higher at 1.62%.
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||1.79||-0.65 %||Jan 16|
|Exchange Rate||8.54||-0.38 %||Jan 16|
|Stock Market||840||-0.08 %||Jan 16|
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January 10, 2019
Consumer prices were unchanged in December compared to the previous month, contrasting the 0.5% rise in November.
January 9, 2019
According to monthly GDP data released by Statistics Norway, total economic output fell 0.3% in November compared to the previous month in seasonally-adjusted terms, contrasting October’s revised 1.1% increase (previously reported: +0.8% month-on-month).
January 8, 2019
According to Statistics Norway, industrial production fell a seasonally-adjusted 1.5% in November compared to the previous month, contrasting the 2.3% rise in October.
December 13, 2018
In line with market analysts’ expectations, Norges Bank announced on 13 December that it was keeping the sight deposit rate unchanged at 0.75%.
December 11, 2018
According to monthly GDP data released by Statistics Norway, the total economy grew 0.8% in October over the previous month in seasonally-adjusted terms, contrasting September’s revised 0.5% contraction (previously reported: -0.6% month-on-month).