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Monday, July 22, 2024

Central bank resists raising rates

The board of Norway’s central bank, Norges Bank, decided to keep interest rates steady on Wednesday by not raising its own key lending rate, since economic development was proceeding as expected.

The bank board kept its important styringsrenten unchanged, at 2 percent. The decision followed the US Federal Reserve Bank’s decision to leave its own interest rates unchanged, and was in line with the views of several local analysts and economists.

“The most important thing now is to get the world economy out of its difficult situation,” Knut Anton Mork, chief economist at Handelsbanken in Oslo, told newspaper Aftenposten. “That won’t happen if rates start rising.”

Svein Gjedrem, soon-to-retire chief of Norway’s central bank, characterized economic growth in Norway as “moderate” and noted that inflation has slowed again, with prices now rising at a rate of less than 2 percent.

Economic activity on a global basis, he said, is “a bit stronger than expected” but still low in industrial countries. While concern over public finances in several European countries has eased, Gjedrem noted that the outlook for the important US economy “is more uncertain.”

The central bank chief said that consideration for both inflation and stable development in production and employment called for continued low interest rates. 

The bank last raised rates in May, from 1.75 percent up to the current level of 2 percent.

Views and News from Norway/Nina Berglund
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