Norges Bank Review: As expected, unchanged rates and little news – Danske Bank

Analysts at Danske Bank offered a quick review of Thursday’s Norges Bank policy decision to leave the key rate unchanged at 1.50%, broadly in line with market expectations.

Key Quotes:

“This morning, Norges Bank (NB) left the sight deposit rate unchanged at 1.50% in a decision widely expected by both markets and analysts. This was a 'small' meeting that only included a press release, i.e. there was no monetary policy report, revised rate path nor press conference.”

“In the evaluation of the domestic economy, NB concluded that new information supports the view that capacity utilization is above normal, but that the economy is close to a peak and inflation is close to target. On the external environment, NB stated that the risk of a sharp downturn is reduced, but is not eliminated.”

“In sum, NB clearly expects the policy rate to remain unchanged at least until the next 'main' meeting in March. This is line with our expectations, but we still pencil in a rate hike in June 2020, even if the probability of this call materialising has fallen considerably in recent weeks and arguably is not much more than 50% at this stage.”