The bank unanimously decided to keep the basic interest rate unchanged at zero percent.
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Norges Bank's Monetary Policy and Financial Stability Committee unanimously decided to maintain the base rate interest rate unchanged at zero percent. The main interest rate is unchanged at zero percent
Norges Monetary Policy and Financial Stability Committee The bank unanimously decided to keep the basic interest rate unchanged level of zero percent. The main interest rate will most likely only be increased in the second half of this year.
A large proportion of the adult population in Norway will be vaccinated by the end of summer
The coronavirus pandemic has led to a sharp collapse in the Norwegian economy. Economic activity in the marketplace has risen since last spring, but recovery is now being slowed down by increased infection and strict infection control measures. On the other hand, information from the health authorities indicates that a large proportion of the adult population in Norway will be vaccinated by the end of summer. At the same time, international economic development is better than expected. This may result in a faster increase in economic activity than previously thought. Nevertheless, it will likely be some time before employment and unemployment return to pre-pandemic levels. Core inflation is still above the target but has fallen in recent months.
Low interest rates help to restore production and employment to normal levels faster
The committee stressed that low interest rates were helping to restore production and employment to normal levels more quickly. This reduces the risk of unemployment rising to a high level. There are signs of increased cost increases both internationally and in Norway, but the strengthening of the koruna and the prospects for moderate wage growth suggest that inflation will decline in the future. The Commission also highlighted that house prices had increased significantly since last spring. A long period of low interest rates increases the risk of a build-up of financial imbalance.
There will be a gradual increase in the base interest rate from the current level
- Overall, the outlook and risk picture suggest a continuation of expansionary monetary policy. When there are clear signs that the economy is normalizing, it will be right again to gradually raise the base rate from the current level, says governor Øystein Olsen.
The forecast for the base interest rate means that it will gradually increase from the second half of this year
There is high uncertainty about further recovery in the economy, but there are prospects that activity will return to normal levels earlier than predicted in the previous monetary policy report. The forecast for the base interest rate means that the interest rate will gradually rise from the second half of this year. This means a slightly faster increase in interest rates than forecasted in December.
