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Norges Bank to stay on hold – Nordea

In view of analysts at Nordea Markets, Norges Bank will be on hold at the interim meeting in January and expects no changes in its view, even with a new Monetary Policy Committee.

Key Quotes

“This year’s first interest rate decision from Norges Bank will be published on 23th of January, at 10.00 AM. In line with the December rate path, we and the markets expect Norges Bank to keep its key interest rate unchanged.”

“The January meeting is an interim meeting with no new interest rate path, nor any press conference. As usual, a statement will be issued with Norges Bank’s assessment of economic developments since the December meeting. New this time around is the Monetary Policy and Financial Stability Committee, which for the first time will convene to determine the key rate. This should be of little or no importance for Norges Bank’s reaction function. The new committee will consist of three members from Norges Bank (the Governor and two Deputy Governors) and two external members. That means the internal members will make up the majority.”

“Without a new rate path, the attention will be on the overall tone of the Committee’s assessment, and if the statement will indicate any change in Norges Bank’s view. We believe it will not. Norges Bank will not draw any strong conclusions at this meeting but prefer to wait – and monitor economic developments – until the March meeting. Hence, the main message from December will be reiterated: “the policy rate will most likely remain at this level in the coming period”. The market is well prepared for such an outcome.”

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