Money in Norway
Norway - Money
Norges Bank cuts rates to record low in March
The Executive Board of Norges Bank unanimously decided to slash the sight deposit rate to 0.25% from 1.00% at its unplanned monetary policy meeting on 19 March. The decision follows its last emergency meeting on 12 March, where it lowered the sight deposit rate from 1.50% to 1.00%. In tandem, the Ministry of Finance (MoF) lowered the countercyclical capital buffer on 13 March, from 2.50% to 1.00%, which will help loosen domestic banks’ lending standards.
The unprecedented rate cuts in March reflect worsening domestic economic conditions, lower oil prices and recent monetary easing by other major central banks due to the Covid-19 pandemic. Unemployment is expected to jump, as layoff notices increased over the past week, while stressed financial markets have raised credit premiums for households and enterprises, which puts further pressure on consumption levels. Therefore, the bank decided to cut rates to ease the burden on households and businesses, and to support a stronger rebound in activity when normal economic conditions prevail.
The Bank stands ready to cut rates further to ensure the rate cuts pass swiftly through money markets.
The next monetary policy decision is scheduled to be taken on 6 May.
FocusEconomics Consensus Forecast panelists are adjusting their forecasts due to the recent developments and new projections will be available in the Nordics publication released on 31 March.
Norway - Money Data
|Money (annual variation in %)||6.4||0.6||5.1||6.0||5.3|
5 years of economic forecasts for more than 30 economic indicators.
Norway Money Chart
Source: Norway Central Bank and FocusEconomics calculations.
|Bond Yield||1.58||-0.65 %||Jan 01|
|Exchange Rate||8.78||-0.38 %||Jan 01|
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March 27, 2020
On 20 March, after Norges Bank cut rates by an unprecedented 75 basis points, the krone ended the day at 12.57 per EUR, marking a record low.
March 20, 2020
The Executive Board of Norges Bank unanimously decided to slash the sight deposit rate to 0.25% from 1.00% at its unplanned monetary policy meeting on 19 March.
March 10, 2020
Consumer prices fell 0.1% in February, following January’s flat reading.
March 6, 2020
Industrial production decreased a seasonally-adjusted 2.3% in February over the previous month, which was down from December’s downwardly revised 1.4% rise (previously reported: +1.5% month-on-month). January’s fall was driven by a contraction in the extraction and related services sector, which accounts for around 65% of industrial production in Norway, as temporary shutdowns in key oil fields weighed on production.
February 10, 2020
Consumer prices were flat in January, following up December’s 0.3% fall.