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According to Jonas Goltermann, Developed Market Economist at ING, a largely unchanged Norges Bank statement means the central bank is set to raise interest rates to 0.75% at its next meeting in September and would now take a major negative surprise to make the Bank change course now

Key Quotes

“We fully expect Norway’s central bank to deliver a hike in September.”

“It’s very unlikely the domestic economy will dramatically worsen over the next month or so. If the current turmoil in markets got significantly worse and oil fell into the 60s that might make the Norges Bank think twice. But even then, it’s more likely to adjust down the rate path for 2019 than to delay the September hike.”

“As long as the recovery in the domestic economy stays on track and oil prices hold up, the central bank is likely to remain in tightening mode. This is likely to support the currency, and we’d expect NOK to outperform over coming months.”