Table of Contents:
The decision of Norges Bank
Norges Bank decided to keep its key policy rate unchanged at 4.5% for the seventh consecutive meeting in November. This choice was in line with market expectations and the central bank has already anticipated a similar decision for the next meeting, scheduled for December. The bank stressed the importance of a restrictive monetary policy to bring inflation back to its target, which implies a delay in monetary easing compared to other
European institutions.
The reasons behind the choice
One of the main reasons why Norges Bank decided to keep rates high is the significant devaluation of the Norwegian krone. This factor justifies the need to keep interest rates at high levels to avoid further inflationary pressures. However, monetary policymakers have acknowledged that the Norwegian economy is showing signs of cooling and that the labor market is slowing down, direct consequences of the monetary tightening implemented in recent months
.
Inflation and future prospects
Another important aspect to consider is that inflation in Norway is slowing down more than expected. This trend could influence the future decisions of Norges Bank, which will have to carefully evaluate economic developments and the signals coming from the market. With inflation showing signs of slowing down, it is possible that the central bank will begin to consider easing monetary policy in the near future, but only if economic conditions allow it
.
The European context
In a European context, it is interesting to note that other central banks, such as the Riksbank of Sweden, are already taking easing measures. Riksbank recently cut borrowing costs by half a point, for the first time in a decade, to stimulate a stagnant economy. This contrast between the monetary policies of different European nations highlights the challenges that each country faces in an attempt to maintain economic stability
.
