Talking Points:
- Interest Rates Remain at 1.5%
- Inflation Persists Below 2.5% Target
- Growing Geopolitical Risk Poses a Threat
Yesterday, Norges Bank elected to maintain their current policy rate of 1.5% and in the absence of any major shocks are expected to maintain this level though 2015 with gradual increases to ensue thereafter.
Rates have remained unchanged as inflation measurements are still below the targeted 2.5%. In addition, growth in the Norwegian economy has stalled.
The state of the Norwegian export sector also faces uncertainty as Norway’s major European trading partners are expected to post slow growth rates on the year of 2.0%. Increasing geopolitical risk between Russia Ukraine and the West also poses a threat to the export sector and the value of the Norwegian Krone ( USD/NOK ).