Norges Bank keeps interest rate unchanged, likely to remain on hold in coming period

Norwegian central bank kept the interest rate on hold today and repeated its view that rates will remain the same in the period ahead. No new rate path was presented, only a statement with Norges Bank’s assessment of economic developments since the December meeting. The main conclusion in “the outlook and the balance of risks suggests that the policy rate will most likely remain at the present level in the coming period”. Therefore, Norges Bank indicates that rates will stay on hold, noted Nordea Bank in a research report.

Norges Bank, in the assessment, stated that developments since the last monetary policy report in December have been roughly as anticipated. The NOK is on the strong side to the central bank’s forecasts while domestic economic developments have been slightly weaker. Moreover, Norges Bank notes that according to the Norwegian Petroleum Directorate estimates, petroleum investment in 2020 might be slightly lower than assumed in the December Report. Still, labor market developments seem to be widely in line with expectations, and underlying inflation is close to the target.

“The central bank prefers to wait and continue to monitor economic developments until the March meeting. And the threshold is relatively high for Norges Bank to indicate any strong changes in its view without conducting the full Monetary Policy analysis, i.e. presenting a new rate path. Overall, we are assured in our view that the key rate will remain unchanged in the period ahead”, added Nordea Bank.