- Summary:
- Norges Bank is expected to keep interest rates unchanged at its monetary policy meeting on January 23rd. The upcoming meeting is an interim meeting
Norges Bank is expected to keep interest rates unchanged at its monetary policy meeting on January 23rd. The upcoming meeting is an interim meeting with no new interest rate path, or a press conference. So we don’t really expect much from the policy meeting or any major move in the USDNOK pair
The Executive Board of Norges Bank’s decided to keep the policy rate unchanged at 1.50% on December 19th 2019 policy meeting. The Norges Bank assessment of the outlook and risks suggests that the policy rate will most likely remain at the current level in the coming months. The Central Bank also noted that if the economic outlook change, the interest rate may also change from the forecast. Norges Bank last raised rates in September 2019, to a total of 75bps in 2019.
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Inflation is close to target
Inflation is close to target, and capacity utilisation is somewhat above the average level. With interest rates close to the current level, there are prospects that inflation will remain close to the inflation target.
Norway’s annual inflation rate declined to 1.4% in December 2019 from 1.6% in the previous month, below the forecasts of 1.5%.
What might change the interest rate path in the future is a stronger NOK and a deterioration in key economic figures. The Gross Domestic Product in Norway came in at 1.30% in the third quarter of 2019 over the same quarter last year matching the expectations.
NOK is stronger against the USD than forecasted and most domestic economic key figures have come in above the forecasts. If those trends persist we might see a rate hike in 2Q 2020.