Danske Bank analysts note that the Norges Bank left the sight deposit rate unchanged at 1.00% in a decision widely expected by both markets and analysts.
Key Quotes
“The board concluded: ‘The Executive Board’s current assessment of the outlook and balance of risks suggests that the policy rate will most likely be raised in June’ . In other words, the central bank sharpened the message from the monetary policy meeting in March, by more explicitly mentioning June as the timing of the next hike.”
“In the evaluation of the domestic economy, Norges Bank mentioned capacity utilisation seems to be rising further, the labour market remains tight and wage growth is improving as expected. In addition, core inflation has been higher than expected and the import-weighted NOK is weaker despite a higher oil price.”
“In summary, Norges Bank clearly clarified that markets should expect a rate hike in June, unless a considerable shock hits the economy. Our call remains that of two additional rate hikes in 2019 (June and December).”
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