DNB Markets: – Norges Bank has failed – HegnarOnline

Norges Bank surprised everyone yesterday by keeping its key rate unchanged at 1.25 percent.

Indeed guaranteed central bank a new interest rate cut before the summer, but the crown reacted yet with considerably strengthened.

Roen has settled over the crown Friday.

EURNOK are 8.6210, virtually unchanged in the current trading. USDNOK are 8.0731, which corresponds to a dollar appreciation of almost two cents. The strengthening against the pound on wood ear, since GBPNOK stands in 11.8965.

– Sensible to let interest rates lie
DNB Markets characterize in today morning report the decision not to lowering the interest rate that makes sense.

– We are expecting a weaker trend in the Norwegian economy this year as a result of a fall in oil investments and oil prices. It may be appropriate to stimulate demand in the economy through lower interest rates.

– But the effects of lower oil investments will turn gradually into the economy, and Norges Bank has therefore room to see how things develop. Interest rates also affect the housing market and debt growth. The risk that these areas can lead to financial instability implies a certain reticence interest rate cuts, writes senior economist Kyrre Aamdal.

– Norges Bank has failed
When expectations of interest rate cuts, both market pricing and among analysts, was so massive, this according to DNB Markets indicate that Norges Bank has not quite succeeded in communicating action its pattern to the markets.

The brokerage has noted that Norges Bank this year very quickly followed up assessments and conclusions in Norges Bank Watch, where Aamdal was a member.

– This applies in particular proposals relating to penny purchases from oil revenues, the opinions about the timing of interest rate cuts and discussion of criteria for a good interest rate path, he writes further.