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19 Sep 2013
Big gains for Norwegian Krone as Norges Bank puts rate cut on ice
FXstreet.com (London) - The Norwegian krone has seen some big swings today, strengthening to one-month highs against the Euro after the Norges Bank decided to maintain interest rates.
Norway’s central bank had previously held a policy of pursuing loose monetary policy through depressed interest rates in order to provide growth conditions. It maintained that it could do so with the capacity to keep inflation depressed. But today’s announcement signalled that it has perhaps abandoned plans to slash rates further, keeping rates at 1.5 percent after inflation hit 2.5 percent last month, beating projections.
The Norges Bank has signalled that that rate hikes may happen some time after Summer 2014.
The Norwegian economy continues to show signs of weakness - the Norges Bank’s third quarter Regional Network Survey released last week fell for the fifth consecutive quarter.
The Krone strengthened against majors across the board, with EUR/NOK hitting EUR0.1281 after whipsawing down to EUR0.1265 before the announcement.
Norway’s central bank had previously held a policy of pursuing loose monetary policy through depressed interest rates in order to provide growth conditions. It maintained that it could do so with the capacity to keep inflation depressed. But today’s announcement signalled that it has perhaps abandoned plans to slash rates further, keeping rates at 1.5 percent after inflation hit 2.5 percent last month, beating projections.
The Norges Bank has signalled that that rate hikes may happen some time after Summer 2014.
The Norwegian economy continues to show signs of weakness - the Norges Bank’s third quarter Regional Network Survey released last week fell for the fifth consecutive quarter.
The Krone strengthened against majors across the board, with EUR/NOK hitting EUR0.1281 after whipsawing down to EUR0.1265 before the announcement.