Norges Bank stood pat today, as expected. A new rate path was not presented today and therefore all eyes were on the statement from Norges Bank’s Monetary Policy Committee, where they gave an assessment of the main economic developments since June. Their conclusion is that “the policy rate will most likely remain at today’s level for some time ahead”, the same as in June.
The Committee highlighted the solid development in the housing market as stronger than they expected. They also note the pickup in economic activity, especially of private and public consumption, as broadly in line with the June report.
Oil prices have risen at a faster pace, but the other side of the coin is that the NOK has bolstered more than projected. Meanwhile, the development in the labour market are seen as weaker than expected, especially employment is noted to have fallen more than expected, said Nordea Bank in a research report.
Given the concerns regarding the assessment of the balance of risks, the central bank notes that the increase in new corona cases, both in Norway and abroad, still signify there is high uncertainty about the economic recovery ahead.
“Overall, we see today’s statement as fairly neutral. Norges Bank will continue to monitor developments until its September meeting”, added Nordea Bank.
