Depositors could breathe a sigh of relief, while borrowers didn’t get any early Christmas gift from Norway’s central bank on Thursday. Its monetary policy committee decided to keep the country’s key policy rate unchanged at 4 percent, in line with economists’ predictions.
“We are not in a hurry to bring interest rates down,” stated Norges Bank Governor Ida Wolden Bache, after the committee opted against any rate cut right now. She added that the overall interest rate outlook “is little changed” since the central bank’s monetary report in September, when the policy rate was trimmed by another quarter-point after starting the year at 4.5 percent.
The current policy rate of 4 percent is more than double that of Sweden’s, which also remained unchanged on Thursday but stands at 1.75 percent after a series of rate cuts this year. Bache and her colleagues, however, think a restrictive monetary policy remains necessary in Norway because inflation “is still too high.” Bache wants the inflation rate to come down to 2 percent.
The Norwegian krone strengthened slightly right after the interest rate decision was announced.
NewsinEnglish.no staff
