By CentralBankNews.info
Norway’s central bank retained its policy rate at 1.5 percent, as expected, saying inflation and economic growth are largely as expected but the decline in oil prices and uncertainty surrounding the euro area had increased the uncertainty surrounding the outlook.
Norges Bank, which last cut its rate in March 2012, added that the Norwegian krone currency had also depreciated since its last meeting in September, reflecting the drop in oil prices.
In September the central bank said it expected the policy rate to remain at the current level until the end of 2015 before it starts to gradually increase. Today it omitted that guidance.
Norway’s headline inflation rate was unchanged in September at 2.1 percent while its Gross Domestic Product rose by 0.9 percent in the second quarter from the first for a contraction of 0.3 percent in comparison with the second quarter of 2013.
Norges Bank issued the following statement:
Norway holds rate, no guidance for same rate by end-’15
October 23, 2014
“New information suggests that inflation and growth in the Norwegian economy are broadly in line with the September projections. Against this background, the key policy rate remains unchanged. At the same time, developments abroad and the fall in oil prices has increased the uncertainty regarding the outlook for the Norwegian economy”, says Governor Øystein Olsen.
Economic growth among Norway’s trading partners is still moderate, but the outlook has deteriorated somewhat since the September 2014 Monetary Policy Report. Uncertainty regarding developments ahead has increased, particularly in the euro area. The expected rise in key rates abroad has again been deferred. Equity prices and oil prices have fallen.
In Norway, unemployment is still stable. Consumer price inflation remains close to 2.5 percent. The krone has depreciated since September, reflecting the fall in oil prices. At the same time, banks have lowered residential mortgage lending rates.”
