Norway’s central bank opted once again to keep its key policy rate unchanged at 4.5 percent on Thursday, but borrowers can expect some relief soon. “We will probably bring the rate down in March,” said Norges Bank Governor Ida Wolden Bache while announcing the central bank’s latest decision.
Bache and her colleagues in charge of monetary policy and financial stability have kept rates relatively high even as other countries have lowered their own, and not just to try to strengthen Norway’s weak krone. They’ve used their policy rate mostly to cool down the otherwise strong Norwegian economy and dampen inflation.
Now that’s producing the desired results, with inflation falling again last month and moving much closer to the bank’s stated goal of 2 percent. Bache noted, though, that unemployment has “edged up” from a low level and cautioned that a “rapid rise in business costs” may stoke inflation ahead. There’s also concern that the new US president’s tariff threats will also raise prices for consumer goods.
Norges Bank’s overnight lending rate remains at 5.5 percent and its reserve rate is 3.5 percent.
NewsinEnglish.no staff
