- Has destroyed its credibility – HegnarOnline

– I feel Norges Bank has destroyed its credibility, it is tempting to add “complete”, but it would have been a little strong, says Knut Anton Mork, chief economist at Handelsbanken, Finansavisen.

Norway Bank decided to keep its key rate unchanged at 1.25 percent, and defied all expectations thus about rate cuts. Central bank interest rate path indicates that there comes a cut during the second quarter, but the missing cut still gave an appreciation of the crown of 2-3 percent.

In December applauded Handelsbanken economists Norges Bank rate cuts, saying that the central bank with the corrected much of the credibility that had been lost through the fall.

– Waiting you that it will take longer for Norges Bank to rectify credibility now?

– Yes. Yes. Yes, says Mork Finansavisen.

– Those statements bastant

– Have you missed in communicating with the market?

– No, I mean that we have not done, says Governor Øystein Olsen Finansavisen.

– I am aware that we surprised. The decision was to some extent a matter of timing. Given the projections, given the interest rate path and given that it goes as we see now, so will the interest rate. But in this round, we chose therefore to await.

In December, when interest rates were lowered across many economists expectations, had risk opposite sign, says Olsen.

– When we were some precautionary. We took out an insurance policy, and it gives us reason to await in this round. In light of the interest rate path is down, I would say that the difference between us and most analysts and observers are more emphasis on various risk factors, he says Finansavisen.

The risk for financial stability may have increased, in light of the price increase of housing and property. And in December there was a greater risk of marked downturn in the economy if Norges Bank did nothing, according to Olsen.

– The downturn has not come, for several good reasons. Consequently, the weight of the somewhat less in our analyzes, and tipped the decision in the direction we once have seen, he said.

– This type of timing risk markets must simply find themselves in to live with?

– Yes. I think I would say that the uncertainty we live in is significant, says Olsen Finansavisen.

– All must recognize that times are abnormal. Those who speak out substantial about what we do have to choose, in the same way that we must choose. Then tradeoffs slightly different.