Norges Bank keeps key interest rate unchanged at 0.75%

Ida Wolden BachePhoto: Terje Bendiksby / NTB

As expected, Norges Bank is keeping the key interest rate unchanged at 0.75%. The interest rate will probably be raised in June.

“As we now assess the outlook and the risk situation, the key policy rate will most likely be raised in June,” Governor Ida Wolden Bache said on Thursday.

Thus, the central bank continues to adhere to the interest rate path announced in the last Monetary Policy Report in March.

The Monetary Policy and Financial Stability Committee’s decision to keep the interest rate unchanged was unanimous.

Uncertain developments

“Rising interest rates will ease the pressure on the Norwegian economy, but employment is expected to remain high. Uncertainty about economic developments and how households will adapt to higher interest rates indicates that interest rates will rise gradually,” Norges Bank wrote in a press release.

However, they emphasized that there is great uncertainty about the impact of the war in Ukraine on Norway’s economy.

“There is a risk that inflation will increase further internationally at the same time as growth weakens,” Norges Bank noted.

Interest rate hikes

In March, Norway’s Central Bank announced that there could be seven interest rate increases by the end of next year. 

“If there are prospects for more lasting high inflation, the interest rate may be raised faster than the interest rate forecast in the previous monetary policy report indicates,” Norges Bank warned on Thursday.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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