Norges Bank: Policy rate will most likely remain at this level – Danske Bank

Danske Bank analysts point out that as widely expected, Norges Bank (NB) kept policy rates unchanged, leaving the sight deposit rate at 1.50 %.

Key Quotes

“The executive board also reiterated its 'on hold' stance and concluded that 'the Executive Board's current assessment of the outlook and balance of risks suggests that the policy rate will most likely remain at this level in the coming period'.”

“We still expect NB to hike rates a fifth time, by 25bp, to 1.75% in 2020, but now expect this to happen in June versus a previous forecast of March. Upon announcement, EUR/NOK moved marginally lower still as the outlook for carry momentum has returned somewhat as a reason for being long NOK going into 2020.”

“Further, across the board, energy-related credit, equities, oil price and NOK are starting to see some tailwind. We remain optimistic that EUR/NOK will retrace lower into 2020.”