Interest rates steady, shares recover

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The executive board of Norway’s central bank kept its key policy rate unchanged at 1.25 percent on Thursday. The Oslo Stock Exchange, meanwhile, seemed to be recovering from a sharp decline on Wednesday.

“The upturn in the Norwegian economy is continuing broadly as expected in June,” the bank board stated, while “underlying inflation has been a little lower than projected.” Uncertainty surrounding international trade and “the UK’s relationship with the EU” (Brexit) can affect economic growth also in Norway, the board stated, but a weaker krone (which was trading at nearly NOK 9 to the US dollar Thursday morning) “may contribute to higher inflation ahead.” Other economists note that the weak krone, however, also boosts Norwegian exports.

“Overall, new information indicates that the outlook for the policy rate  … is little changed,” stated Norges Bank Governor Øystein Olsen, from June when the board boosted it by a quarter point. The board has earlier stated that rates may likely increase later this year, with several analysts predicting another quarter-point increase next month.

Norway’s stock market, meanwhile, had a strong opening Thursday after being battered Wednesday along with shares all over the world. The Oslo Stock Exchange’s main index fell 2.4 percent on Wednesday, after shares in oil- and oil service companies fell anywhere from 6- to 10 percent.

The exchange opened up 0.5 percent on Thursday, however, with some of the shares up as much as 5.5 percent. Trading settled down shortly thereafter, with the index hovering around the zero point (unchanged) by late morning. staff