As we expected, Norges Bank left the policy price without changing last week. After all, the interest rate path from December does not necessarily reduce the interest rate in March. The new interest rate track now refers to cuts in interest rates is slower and smaller on the expected time horizon until the end of 2027. The policy price is still expected to be reduced, but Norges does not give any timing details, which is the Commerzbank Antj Praefcke analyst.
Do not remain stable in the coming months
Norges justifies its position by saying that inflation has risen and that it was significantly higher than expected; if the premature policy price is reduced, prices may continue to rise quickly. In this regard, Norges interacts with high inflation rates at the beginning of the year.
“The interest rate track is now about 25 basis points higher than before the expected horizon. Similar to other central banks, Norges sees the great uncertainty in the commercial conflict and the possibility of high customs tariffs. The accurate impact on prices and growth can only be estimated to pressure prices.”
“I think Norges will not reduce prices until June as soon as possible, when it introduces its new monetary policy report. Until then, it will have another three months of inflation data (from March to May) and more information about the trade conflict and its economic impact. Krone should remain stable in the coming months and be able to defend its gains, with a light direction.”
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