Norway Central Bank Keeps Rate on Hold, as Expected
Norges Bank said it is prepared to raise borrowing costs again if needed to bring inflation back to target.
- On Monday, Slovak central bank chief Peter Kazimir stated the European Central Bank must raise interest rates again to prevent inflation from becoming entrenched, warning that markets may underestimate the necessary policy path.
- Although the ECB held rates unchanged last Thursday, Kazimir argued the pause was not final, citing sky-high energy costs that policymakers say will eventually trigger second-round inflation effects.
- Financial markets currently anticipate two to three rate hikes over the coming year, though Kazimir warned that cost pressures could build within the 27-member Governing Council before appearing in standard economic data.
- Separately, Norges Bank Governor Ida Wolden Bache announced Thursday that Norway kept its policy interest rate on hold at 4.5%, while remaining prepared to raise rates if needed to meet inflation targets.
- "Waiting for certainty does not necessarily make for good policy," Kazimir said, emphasizing the urgency of returning inflation to the European Central Bank's 2% target before price pressures become entrenched.
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The institution highlighted in a statement that "restrictive monetary policy is still needed to reduce inflation to the target within a reasonable time horizon".
The central bank of Norway maintained its basic interest rate on Thursday, but left open the possibility of a new monetary squeeze if inflation continues to rise. Exclusive material for subscribers. To have full access, access the link of the subject and register.
Aftenposten
The chief economists do not believe in changes to the key interest rate when Norges Bank presents its interest rate decision on Thursday. What happens in the future will be more exciting.
ECB’s Kazimir Says Markets May Underestimate What’s Needed on Rates
Investors may not be pricing enough tightening by the European Central Bank, with the energy shock showing no sign of fading and inflation picking up again, according to Governing Council member Peter Kazimir.
ECB will have to raise rates again, extent uncertain, Kazimir says
The European Central Bank will have to raise interest rates again to prevent high inflation from getting entrenched and markets may be underestimating what is needed to quell price pressures, Slovak central bank chief Peter Kazimir said.
Mortgage customers still have to shoulder high interest rates after Norges Bank kept its key interest rate unchanged at 4.5 per cent. At the same time, Oslo Børs suffered a heavy Thursday, with a sharp fall in Aker BP. Norwegian and Widerøe, on the other hand, report record high filling rates, while new quarterly reports and fresh industry figures are on the program Friday. Norges Bank decided on Thursday to [...] The post Norwegian economy: Røk…
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