Norges Bank keeps key rate unchanged – NRK

– We sent not a coin, but there was a marginal balance. There was an option to lower the interest rate now, says Governor at the press conference following the announcement of the interest rate decision.

He points out that the Norwegian economy so far have been broadly in line with Norges Bank projected in March.

– After an overall assessment requested the Executive Board to keep its key rate unchanged at this meeting, says Governor Øystein Olsen.

The Executive Board shows that economic growth among Norway’s trading partners is still moderate. Inflation is very low in many countries, while in Norway it is close to the inflation target of 2.5 percent.

– Unemployment has increased as expected. This spring’s wage settlement indicates so far that wage growth may be somewhat lower than previously assumed, says Governor

Set likely cuts in June

On the other side shows the Executive Board to the price of oil risen and that household demand remains high.

Meanwhile house prices to grow, while household debt has increased more than expected.

– From the information we have received in the past, there are still prospects that key interest rates will be lowered in June, says Governor Øystein Olsen.

At the press conference yesterday Olsen far to confirm that it is almost a 100 percent probability of an interest rate cut at the next meeting.

– We have now signaled very clearly probability, but we do not give any promise, we commit not to the mast. Things can happen, it does always, says Olsen.

– Starter doubt Norges Bank

DNB Markets writes in a trading update that the reason is now ready for a rate cut in June, unless key figures ahead are clearly better than expected.

Analysts at Handelsbanken writes on his side in an update that they are now beginning to doubt that Norges Bank will actually cut at June meeting.

– We are seriously afraid that Norges Bank now harbors far behind; equivalent to the Swedish central bank was, writes macro economist Marius Gonsholt Hov in an e-mail to NRK.

Chief Economist Jan Andreassen oak group says to NRK that Norges Bank provides part soothing messages and reviews of Norwegian economy in its grounds, but is concerned that the crown can be too strong.

– We must expect that investors now will bid up the value of the krona in the hours, days and weeks to come, he said.

Half expecting lower key rate

The economists had previously split down the middle in the view of the Executive Board would cut in the central bank’s key interest rate, to the lowest level since Norges Bank was established in 1816.

A survey conducted by TDN Finans showed that 7 out of 14 economists thought on a cut of 0.25 percentage points to 1 percent.

The rest predicted an unchanged interest rate.

March indicated Norges Bank in its Monetary Policy Report that interest rates would be cut before the summer, and that it was 50 per cent probability that the cut came already at the monetary policy meeting in May.

When surprised central bank market by keeping its key rate unchanged while all the country’s brokerages expected cuts.