The Norwegian central bank’s key policy rate, kept at 0.0 percent this week, isn’t likely to rise any time soon. The Corona crisis continues to hold back economic growth and rates won’t rise until that changes.
Economic development, or lack thereof, “is in line with projections,” said Norges Bank Governor Øystein Olsen when confirming that the policy rate remained unchanged after another meeting of the bank’s Monetary Policy and Financial Stability Committee. It will “likey remain at today’s level for some time ahead,” Olsen said.
The bank’s press release noted how economic activity fell again late last year. Housing prices have risen further but economic recovery “is now being held back by higher infection rates and stricter containment measures.” On a brighter note, the bank also noted how “vaccination is well underway, and economic growth is expected to pick up further out in 2021.”
The ongoing economic downturn in the meantime, along with “considerable uncertainty surrounding the outlook,” prompted the bank’s committee to keep the policy rate “on hold until there are clear signs that economic conditions are normalizing.”