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Norway central bank rates seen on hold after recent hikes: Reuters poll

Published 10/16/2019, 08:34 AM
Updated 10/16/2019, 08:36 AM
Norway central bank rates seen on hold after recent hikes: Reuters poll

By Terje Solsvik

OSLO (Reuters) - Norway's central bank is expected to keep its key policy interest rate on hold next week and is unlikely to hike again in the foreseeable future, a Reuters poll of economists found on Wednesday.

Norges Bank has raised rates four times in the last 13 months amid the fastest economic expansion since 2012, defying a global slowdown thanks to strong investment growth in the country's oil and gas industry.

The central bank said in September however that the chance of further policy tightening had diminished amid a global economic slowdown that has led a large number of central banks around the world to cut rates.

All 35 economists polled by Reuters expect the central bank to maintain its deposit rate at 1.5% when it announces its decision on Oct. 24. Only eight - less than one in four - predict that a hike would follow in the next several years.

"Developments since September have been more or less in line with the central bank's expectations, so there won't be any signals of policy changes to come," DNB Markets economist Kyrre Aamdal said of the upcoming meeting.

The policy-setting board will be monitoring the effects of an ongoing weakening of the Norwegian crown currency however, to see if it has any longer-term impact on inflation, Aamdal added.

The crown is trading at 18-year lows against the dollar and near an all-time low against the euro as investors flock to safe-haven currencies at a time of global uncertainty.

Only one economist was predicting that Norges Bank may start easing policy, penciling in a cut for the second quarter of 2020.

(Polling by Sarmista Sen in Bengaluru; Editing by Chizu Nomiyama)

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