Norges Bank Sees No Interest Rate Increase Until 2014
The Norwegian krone weakened today after the central bank left interest rates stable and signaled that no change to the monetary policy is expected until the next year.
Norges Bank left its key interest rate at 1.5 percent today. Governor Oeystein Olsen said that Norway’s economic growth and inflation “have been slightly lower than projected”. The central bank stated:
The key policy rate is low because inflation is low and because interest rates abroad are very low. Growth prospects for our trading partners have weakened, but global growth remains robust.
Olsen indicated, not unlike the Reserve Bank of New Zealand Governor, that it is likely no interest rate hike occur this year:
The analyses suggest that the key policy rate be kept low longer than previously anticipated. The first increase in the key policy rate is now projected to take place in spring 2014.
USD/NOK rose from 5.7421 to 5.8030 and EUR/NOK advanced from 7.4405 to 7.5313 as of 16:14 GMT today.
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Earlier News About the Norwegian Krone:
- Olsen Speaks About Interest Rate Cut, Krone Down (2013-02-15)
- Norwegian Policy Makers Think Krone Too Strong (2013-01-17)
- Norwegian Krone Holds Ground Even as Manufacturing Struggles (2012-11-01)
- Krone Rises as Norges Bank Does Not Plan to Buy Foreign Currency (2012-10-31)
- Positive Fundamentals in Norway Benefit Krone (2012-08-07)