Chief Economist in the largest Nordic and the largest Norwegian bank states that the policy rate is not changed when Norges Bank’s Executive Board’s monetary policy meeting on Thursday.
– The question is what Norges Bank signals the future, says chief economist Steinar Juel at Nordea Markets.
– Our assessment is, like everyone else, that it’s not going to happen with interest rates at this meeting, says chief economist Øystein Dørum DNB Markets.
Shared Opinions
However, there is tension related to what Norges Bank envisions future. It separates the banks teams in their assessment, but only narrowly.
Both agree that the interest rate path – which is Norges Bank’s projections for how the policy rate will evolve – will level off.
is contrary to the forecast from Jan Andreassen Oak Group, who before the weekend said he envisages a half from the current 1.5 per cent to a discount rate of 0.75 percent through next year.
– Unchanged
– We expect an unchanged policy rate, says chief economist at Sparebank 1 SR-Bank, Kyrre M. Knudsen.
– When we look at the interest rate path forward, that is how the interest rate outlined the future, expect we are not big change. Probably it is a little right because inflation figures have been slightly higher than Norges Bank had anticipated.
Knudsen continues:
– Norwegian economy has gone about as Norges Bank had expected. Regional network shows moderate growth in companies and Norges Bank operates pretty much emphasis on this network.
Knudsen also shows that the interest rate path is affected by what is happening internationally.
– In utllandet have European rates have declined slightly, while American rates have gone up slightly. It is therefore better in the United States, while Euopra are weaker.
– Raises clean path a bit
– In sum, we believe that inflation means that Norges Bank will raise interest rate path a bit, but that there will be no major changes. Norges Bank has been quite transparent in how they set interest rates, so there should not be any big surprises, says chief economist Knudsen.
Weakens cut-view
– excitement before the monetary policy meeting at Norges Bank is related to two things: What kind of interest rate path they produce and what they convey uncertainty about interest rate path. At the monetary policy meeting, in June, they said that there is a small chance that it can get a clean cut. We believe that they will still hold the door open, but that the probability of a cut will be smaller, says Dørum said.
Nordea goes a step further:
– As far as we can see, the short-term adjust the interest rate path slightly. We think they remove what was a signal in June about a possible cut, says Juel said.
Three up, two down
Experts agree that different factors pulling rate path in both directions, and the conclusion is that it evens out – so that the policy rate will remain at the current low level long, maybe longer than that until now has been estimated.
Dorum analysis is as follows:
– It is lower international interest rates, which in isolation draws Norwegian interest rates down. But the crown is weaker, and the isolation rate up. So we see that the margin between the policy rate and the lending rate is going down. This suggests a higher policy rate. Inflation in Norway is currently slightly higher than Norges Bank projected in June. This indicates an increase. But the activity here at home, especially lower oil investments, pulls down. Three pulls up and two pull down, and then smooth it out, he says. (© NTB)
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