Norges Bank Key Policy Rate (Jan): 0.50% vs. Exp. 0.50% (Prev. 0.50%)

• Based on the Committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised in March


• Underlying inflation has risen more than expected and is now close to the inflation target.


• Higher interest rates will also help counter a build-up of financial imbalances.


• The Committee is also concerned with the risk of a potential rise in domestic price and wage inflation due to capacity constraints and persistent global price pressures.

Via Norges Bank

Reaction details (09:02)

• No reaction seen in EUR/NOK with the announcement in line with expectations

Analysis details (09:05)

• As expected, the Key Rate was maintained at 0.50% and the Norges Bank reiterated its guidance towards a March hike. The Bank acknowledged the increase in inflation, explicitly noting upside in underlying prices, but hasn't added too much to the discussion here at this stage. Omicron remains a point of concern, but this is likely more of a precautionary mention than any significant worry at this stage.


• Overall, the announcement was as expected and we now look to incoming inflation readings to determine if an upward revision to the rate path may be justified at the March gathering where it continues to flag the next hike.

20 Jan 2022 - 09:00- ForexImportant- Source: Reuters