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MNI INTERVIEW: Norges Bank Needs Scenarios For Krone Weakness

(MNI) London

Norges Bank Watch author Professor Leif Anders Thorsrud talks to MNI about the central bank's struggles with anticipating krone weakness.

Norges Bank should publish economic scenarios illustrating how alternative assumptions can affect its main policy projections, one of the authors of an annual report into monetary policy commissioned by the Norwegian central bank told MNI, pointing in particular to repeated failures to anticipate a weaker currency and the associated uplift in inflation.

While Norges Bank should continue to produce its quarterly economic forecasts on the assumption that the krone will oscillate around a constant level on the I-44 import-weighted index, it would be useful to provide accompanying alternative scenarios, said Leif Anders Thorsrud, a Professor at the BI Norwegian Business School, who worked on Norges Bank Watch 2024.

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Norges Bank should publish economic scenarios illustrating how alternative assumptions can affect its main policy projections, one of the authors of an annual report into monetary policy commissioned by the Norwegian central bank told MNI, pointing in particular to repeated failures to anticipate a weaker currency and the associated uplift in inflation.

While Norges Bank should continue to produce its quarterly economic forecasts on the assumption that the krone will oscillate around a constant level on the I-44 import-weighted index, it would be useful to provide accompanying alternative scenarios, said Leif Anders Thorsrud, a Professor at the BI Norwegian Business School, who worked on Norges Bank Watch 2024.

Keep reading...Show less