Norway’s central bank (Norges Bank) kept its key policy rate at zero on Thursday. The lack of a long-anticipated increase was expected and the Norwegian krone weakened on the news, trading at just over NOK 9 to one US dollar on Thursday afternoon.
The bank’s board that decides interest rate levels and the bank’s governor, Øystein Olsen, warned once again, however, that rates may rise in September. They were brought to zero on May 7 last year, when the Corona pandemic was arguably at its worst, and have stayed down ever since.
Now, with the pandemic finally starting to ease with more than 80 percent of Norwegians vaccinated, the economy is recovering and the bank may raise rates to help ward off inflation. Analysts speculate several hikes in the key policy rate over the next few years, probably of a quarter-point each. Even that, however, will leave the country with historically low rates, at least over the next two years.