The Norwegian krone weakened because of the statement but has bucked later and can complete the session roughly a flat.
As was generally believed, the Norges Bank kept the policy rate (its actual interest rate) at zero, declaring that the policy rate will most expectedly settle at today’s level for some time ahead. The overnight lending rate stood at 1%, while the reserve rate at -1%. The central bank expressed how the nation’s economy prospered after the coronavirus pandemic.
The COVID-19 epidemic has been guided to a notable downturn within the Norwegian economy
The movement has pulled up during summer, and unemployment has tended lower. The increase in infection rates may put a restriction on the development within the coming period. It’ll need time for output and employment to confirm to pre-pandemic levels.
The Norges Bank declared that underlying inflation was above target. Nevertheless, the appreciating krone and low wage increase should defeat it. The statement also revealed that low-interest rates helped the economy. Even a protracted period of low rates can cause financial imbalances. Although, the bank designated that it’s planning to keep rates at the existing level for an extended time.
The policy rate estimation is adjusted little since June 2020 Monetary Policy Report. It expresses a rate at the current level over the consequent few years, in the middle of a continuous rise as an activity demands a more normal level.
USD/NOK was nearly flat at 9.4950 as of 19:52 GMT on Wednesday, succeeding growing to the daily high of 9.5942 forward. EUR/NOK was at 11.0802 after opening at 11.0624 and progressing to the session high of 11.1747. GBP/NOK started at 11.7827, turned to the session peak of 11.8625 but moved back to 11.7922 later.