Norway Is Seen Leading the Way in Post-Covid Interest Rate Hikes
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Read entire articleNorway has never cut rates below zero or experimented with quantitative easing, in part because most of its stimulus has been fiscal.
The krone, meanwhile, will end 2020 as the worst performing of the world’s 10 most-traded currencies, in part due to the economy’s reliance on oil. That exchange-rate weakness has helped push inflation above the central bank’s 2% target, with underlying annual consumer prices hitting 2.9% in November.
The central bank signaled that significant uncertainty remains, as the pandemic tightens its grip across Europe.
“The sharp economic downturn and considerable uncertainty surrounding the outlook suggest keeping the policy rate on hold until there are clear signs that economic conditions are normalizing,” Governor Oystein Olsen said in a statement.