The Norwegian central bank raised its key interest rate to 0.5% from 0.25%, as expected, while stressing that a further increase is possible in March.
In September, Norges Bank became the first major western central bank to raise interest rates after the pandemic, when it had raised the key interest rate to 0.25% from zero, while hinting that a new rise would come in December.
The central bank kept its policy unchanged, indicating a gradual increase in the coming years to about 1.75% by the end of 2024.
High electricity prices have led to higher inflation and while underlying inflation is below target, it is likely to rise with rising wages and higher inflation of imported goods.
“The goal of stabilizing inflation around the limit set by the central bank suggests that the interest rate should be raised to a more normal level,” he said.
However, the central bank warned that further interest rate hikes could be postponed if more measures were needed to tackle the coronavirus outbreak and economic activity was reduced until spring next year.
“There is considerable uncertainty about the evolution of the pandemic and its impact on the economy,” said Governor Oystein Olsen.
“But if economic developments are broadly in line with forecasts, the policy rate is likely to rise in March,” he said.
.
Source From: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
