Norway raises key rate and signals it’s nearing a peak

The Norges Bank raised its interest rate by 25 basis points Thursday, just as Bloomberg analysts forecasted. Thus, the current rate is 2.75%, the highest since February 2009. It’s worth noting that Bloomberg also predicted the possibility of further hikes.

Although the pace of inflation has fallen, there are concerns that the Nordic economy has a rather gloomy outlook. That’s why the Norges Bank’s actions are more aggressive than it was expected. However, the bank believes that it’s possible to successfully achieve two goals. However, the bank itself believes that the economy will be able to avoid a sharp decline, and plans to tighten monetary policy will be successfully implemented. 

According to Ida Wolden Bache, governor of the Norges Bank, the bank aims to achieve consistently low inflation and sustainable economic development. She believes that an interest rate of around 3% will help maintain this balance.