(Finance) – The central bank of Norway unanimously decided to keep the reference rate unchanged at 0.75%, respecting the expectations of the market. “Based on the Committee’s current assessment of the prospects and risk balance, the policy rate will most likely be increased in June“says Governor Ida Wolden Bache. According to Norges Bank, rising interest rates will ease the pressures in the Norwegian economy, but employment is expected to remain high.” Uncertainties surrounding the economic outlook and household response to the ‘interest rate increases justify a gradual increase in the policy rate “, reads the statement.
The central bank notes that the recovery of the Norwegian economy continued over the winter. “The labor market is rigid and unemployment is lower than expected – reads the analysis – Global inflation has continued to rise. Domestic prices have recently increased a little less than expected, but it is expected that rising wage growth and inflation of imported goods will cause underlying inflation to rise“.
The Norges Bank Committee noted that there is “one substantial uncertainty about the potential economic impact of the war in Ukraine“and said he was” concerned about the risk of an acceleration of price and wage inflation in Norway. “If there are prospects of persistently high inflation,” the reference rate could have risen faster than indicated. from the forecast of the reference rate in the March Report “.