The Norwegian krone declined due to the report but has bounced later and will end the session about a flat.
As was generally assumed, the Norges Bank held the policy rate (its actual interest rate) at zero, saying that the policy rate will most probably settle at today’s level for some time ahead. The overnight lending rate endured at 1%, while the reserve rate at -1%. The central bank demonstrated how the nation’s economy fared after the COVID-19 pandemic.
The coronavirus epidemic has pointed to an apparent downturn in the Norwegian economy
The movement has picked up during summer, and lay-offs have drifted lower. The rise in infection rates may put a restraint on the increase in the following period. It will need time for output and employment to turn to pre-epidemic levels.
The Norges Bank stated that underlying inflation was an overhead target. However, the appreciating krone and weak wage increase should reduce it. The report also disclosed that low-interest rates eased the economy. Even a prolonged period of low rates can generate financial imbalances. Nonetheless, the bank indicated that it is organizing to keep rates at the current level for a long time.
The policy rate calculation is undergoing some changes since the June 2020 Monetary Policy Report. It indicates a rate at the prevailing level over the next couple of years, accompanied by a progressive rise as activity requests a more normal level.
USD/NOK was about flat at 9.4950 as of 19:52 GMT yesterday, subsequent growing to the daily high of 9.5942 ahead. EUR/NOK was at 11.0802 after beginning at 11.0624 and advancing to the session high of 11.1747. GBP/NOK started at 11.7827, returned to the session maximum of 11.8625 but drew back to 11.7922 afterward.