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The markets price in approx. 30 % probability for a rate cut at the March meeting and close to 100 % probability for a rate cut in June. Analysts at Nordea warn against interpreting Norges Bank as a market-driven central bank and expect rates to be on hold for now.

Key quotes

“Norges Bank role in managing financial markets in large is minuscule and fundamentals don’t argue for a rate cut (yet).” 

“From a risk management perspective, one could argue that Norges Bank would react. But as long as they see the ramifications of the coronavirus on the economies as temporary, it makes little sense to cut rates. While there is high uncertainty around the whole situation, we think Norges Bank will stay calm for now and adopt a wait-and-see stance.”