-
Policy
Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM POLICY: -
EM Policy
EM Policy
Exclusive interviews with leading policymakers that convey the true policy message that impacts markets.
LATEST FROM EM POLICY: -
G10 Markets
G10 Markets
Real-time insight on key fixed income and fx markets.
Launch MNI PodcastsFixed IncomeFI Markets AnalysisCentral Bank PreviewsFI PiFixed Income Technical AnalysisUS$ Credit Supply PipelineGilt Week AheadGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance CalendarsEZ/UK Bond Auction CalendarEZ/UK T-bill Auction CalendarUS Treasury Auction CalendarPolitical RiskMNI Political Risk AnalysisMNI Political Risk - US Daily BriefMNI Political Risk - The week AheadElection Previews -
Emerging Markets
Emerging Markets
Real-time insight of emerging markets in CEMEA, Asia and LatAm region
-
Commodities
-
Credit
Credit
Real time insight of credit markets
-
Data
-
Global Macro
Global Macro
Actionable insight on monetary policy, balance sheet and inflation with focus on global issuance. Analysis on key political risk impacting the global markets.
Global MacroDM Central Bank PreviewsDM Central Bank ReviewsEM Central Bank PreviewsEM Central Bank ReviewsBalance Sheet AnalysisData AnalysisEurozone DataUK DataUS DataAPAC DataInflation InsightEmployment InsightGlobal IssuanceEurozoneUKUSDeep DiveGlobal Issuance Calendars EZ/UK Bond Auction Calendar EZ/UK T-bill Auction Calendar US Treasury Auction Calendar Global Macro Weekly -
About Us
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Real-time Actionable Insight
Get the latest on Central Bank Policy and FX & FI Markets to help inform both your strategic and tactical decision-making.
Free AccessMNI NORGES WATCH: Hikes, Foresees Rates To Stay High-For-Long
The Norges Bank surprised the majority of analysts by hiking 25 basis points to 4.5% at its December meeting, and highlighted the risks of inflation remaining persistently above target while shrugging off recent softer data.
The Norwegian central bank made clear that it now expects to hold the policy rate at 4.5% for a protracted period of time, in the so-called “Table Mountain” approach. Its rate projection showed the first cut coming between the final quarter of 2024 and early 2025 with the policy rate only dipping to 3.9% in 2025 and down to 3.2% in 2026.
The quarterly Monetary Policy Report indicated inflation on the core inflation CPI-ATE measure is set to hold above the 2.0% target throughout the forecast period, coming in at 4.8% in 2024, 3.5% in 2025 and 2.5% in 2026. Norges Bank cut its onshore growth forecasts, with mainland, or non-oil and gas sector, GDP projected to expand by just 0.1% in 2024, down from the previous 0.3%, while overall GDP growth was raised to 0.8%, from 0.4% for 2024 and to 1.2% for 2025 from 1.0%.
ECONOMY COOLING
Policymakers voted unanimously for the hike, choosing to place relatively little weight on the near-term slowdown in onshore activity.
“We see that the economy is cooling down, but inflation is still too high. An increase in the policy rate now reduces the risk of inflation remaining high for a long period of time. The policy rate will likely be kept at 4.5% for some time ahead”, Governor Ida Wolden Bache said.
Norges Bank is predicting a prolonged period of krone softness. On the trade-weighted I-44 index the krone was shown at 119.7 in 2023 and 121.5 in 2024 and then at 120.5 in 2025, with a lower reading indicating appreciation.
Krone weakness has been greater than predicted by interest rate differentials and oil and gas prices.
"A weaker krone leads to higher imported goods inflation and improves Norwegian firms’ cost competitiveness. This stimulates Norwegian net exports and overall activity," Norges Bank said in the MPR. "Increased labour costs, continued high prices for many intermediate goods and the krone depreciation will contribute to keeping inflation elevated.”
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.