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Norges Bank cut rates to 0.75%

FXStreet (Edinburgh) - Mostly in line with market consensus, the Norges Bank has lowered its key policy rate by 25 bp at its meeting today, taking the benchmark rate to 0.75% from 1.0%.

The Nordic central bank has assessed that growth overseas remains moderate, with growth prospects amongst Norway’s trading partners expected to gather traction later in the year, albeit at a slower pace than initially estimated.

The Norges Bank showed concerns regarding the Chinese economy, the rest of the emerging markets and the impact of lower oil prices on inflation.

Back to Norway, NB argued that the domestic economy has expanded in line with previous estimates, although the persistent weakness in oil prices could derail in slow growth for an extended period of time. The bank sees the strong depreciation of NOK helping consumer prices to pick up pace in the future.

When comes to NOK, the Norges Bank noted “The krone has depreciated markedly since June and is weaker than projected in the June Report. The depreciation must be seen in connection with the oil price decline and a narrowing of the interest rate differential against other countries”.

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