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MNI NORGES BANK WATCH: Eyes On Guidance As Rates On Hold

(MNI) London

Norges Bank is seen leaving policy unchanged at its January meeting, though it could adjust guidance.

Norges Bank looks set to leave its policy rate unchanged at 4.5% at its January meeting, in line with comments by Governor Ida Wolden Bache following December’s 25-basis-point increase, and while there has been speculation it could change its guidance to remove the possibility of further hikes this seems less likely than otherwise.

In December, Wolden Bache said there would be no need for more hikes if the economy evolved as expected. The current guidance still mentions a willingness to make further rate increases if cost inflation remains high or "the krone turns out to be weaker than projected", but it would be unlikely to change the language so soon to focus solely on the potential for cuts.

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Norges Bank looks set to leave its policy rate unchanged at 4.5% at its January meeting, in line with comments by Governor Ida Wolden Bache following December’s 25-basis-point increase, and while there has been speculation it could change its guidance to remove the possibility of further hikes this seems less likely than otherwise.

In December, Wolden Bache said there would be no need for more hikes if the economy evolved as expected. The current guidance still mentions a willingness to make further rate increases if cost inflation remains high or "the krone turns out to be weaker than projected", but it would be unlikely to change the language so soon to focus solely on the potential for cuts.

Keep reading...Show less