According to analysts at ING, the Norwegian central bank looks set to go firmly against the global rate cut tide on Thursday, where the stage is set for interest rates to increase by a quarter-point to 1.25%, marking the second rate hike so far in 2019.
Key Quotes
“But given that this move was clearly signposted by policymakers back at the May meeting, the bigger question is whether the bank will signal a third increase later in the year.”
“Domestically, the case for tightening continues to look fairly solid.”
“The combination of stronger near-term investment and the weaker krone should have the effect of boosting Norges Bank’s rate path in the short-term.”
“Wrapping all of this together, it looks pretty likely that the Bank will incorporate a further rate hike later this year into its projections. We think such a move is most likely to happen in December.”
“All this could support NOK in the short term and even deliver a lower USD/NOK.”
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