Norwegian Key Policy Rate N/A 4.25% vs. Exp. 4.25% (Prev. 4.25%); "the policy rate will likely be raised in December". "If the Committee becomes more assured that underlying inflation is on the decline, the policy rate may be kept on hold”

Rates

• “Based on the Committee’s current assessment of the outlook, the policy rate will likely be raised in December.


• "The policy rate is likely close to the level needed to tackle inflation, which provides the Committee with a little more time to assess whether there is a need to raise the policy rate further".


• "If the Committee becomes more assured that underlying inflation is on the decline, the policy rate may be kept on hold”


• There will likely be a need to maintain a tight monetary policy stance for some time ahead.
  

Labour Market

• The labour market is still tight, but pressures in the Norwegian economy are easing

Inflation

• The longer inflation remains high, the more costly subsequent disinflation may prove to be.


• Since the September 2023 Monetary Policy Report, inflation has fallen more than expected, and economic activity has been somewhat lower than projected.


• On the other hand, the krone depreciation may contribute to sustaining inflation.

Via Norges Bank

Reaction details (09:07)

• In wake of the announcement EUR/NOK initially lifted higher from 11.8350 to 11.8450 before swiftly pulling back to the 11.80 mark. In the five-minutes since the announcement, EUR/NOK has returned to the 11.8250 area.

Analysis details (09:07)

• As a reminder, Norges Bank Governor Bache will hold a press conference at 09:30GMT.


• The most pertinent section of this non-MPR meeting is the acknowledgement of the recent cooler-than-expected inflation readings and that, depending on the next two releases and the December MPR, they may well be able to leave rates on hold in December; nonetheless, the headline guidance statement still looks for tightening to "likely" occur in December.

02 Nov 2023 - 09:00- Fixed IncomeImportant- Source: Reuters