rate of Interest
the key policy rate be kept unchanged at 0.5 per cent.
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Norges Bank keeps the key rate unchanged at 0.5 per cent, says the central bank in a press release Thursday.
the Decision was expected. Only one of the 14 analysts expecting that interest rates would be set down the rest waited interest rates remain unchanged, according to estimates that TDN Finans has collected.
In the central bank’s last renteprognose, which was laid out in connection with the interest rate decision in the end of september, indicating the central bank that interest rates will remain close to the current level of 0.5 per cent in the next few years. At the same time indicates the forecast that there is a slightly greater probability that the key policy rate is down than up next year.
“Since rentemøtet in september has expected interest rates with trading partners increased slightly. At the same time, oil prices increased slightly more than assumed and the crown has appreciated”, writes the Norges Bank in the press release.
“capacity utilisation in the Norwegian economy looks overall to be about the same as assumed in september. House prices and household debt have risen somewhat more than projected. Consumer price inflation has been lower than expected,” writes the central bank.
Overall, differ not development since september materially from the projections in the previous monetary policy report. It suggests that the key policy rate be kept unchanged at this meeting, ” says governor Øystein Olsen in the message.
Stronger krone
In the executive board’s justification, it is also worth noting that the board of directors associate kronestyrkingen the last few weeks to the increase in oil prices.
“the Crown has appreciated and is stronger than projected in september. Share prices lagging, among others, together with the increase in oil prices”, states the executive board’s justification for the decision.
the Executive board has also noted that the government’s proposal to increase the oljepengebruken over next year’s government budget is somewhat lower than the central bank assumed in their forecasts from september.
Higher premiums in the money market
the Executive board also points out that that the premium in money market rates so far in the quarter has been slightly higher than assumed. Money market rates is an indicator of the banks ‘ costs of wholesale funding and higher money market rates can, in isolation, lead to that banks put up their lending rates to individuals and businesses.
“the Premium in the Norwegian money market has so far been somewhat higher than the estimate for the current quarter, but is expected to slow down towards the end of the year. Banks ‘lending rates is little changed”.
It is precisely these interest rates out to the public, Norges Bank tries to influence by making changes in the base rate. The past year has, however, the key policy rate and the main referanserenten in the money market, tremånedersrenten, separated the layers.
despite two interest rate cuts have the money market rate hardly fell. And the last time the in addition begun to rise (see graph).
While the difference between the key rate and the threemonth money market rate last year was about 0.25 percentage points is the today on closer 0,60 percentage points.
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