Norwegian Central Bank Raises Rate to 4.5%, Swiss Keeps at 1.75%
The Norwegian central bank raises its interest rate by 25 basis points, while the Swiss Central Bank maintains the rate at 1.75%
Norwegian Central Bank Decision
On Thursday, December 14, at the last meeting, the Norwegian Central Bank decided to increase the main interest rate by 0.25%, setting it at 4.5% annually, reports "Interfax-Ukraine".
This decision contradicts the expectations of analysts surveyed by Trading Economics, who predicted the rate to remain at the previous level of 4.25%.
Central bank representatives explained this increase as a necessity to contain a prolonged period of high inflation, although they recognized a slowdown in economic growth.
The rate is expected to be maintained at 4.5% for the near future.
In Norway, inflation is accelerating: in November, it reached 4.8%, while in October it was 4%.
Swiss National Bank Decision
On the same day, the Swiss National Bank (SNB) left its key rate unchanged at 1.75% during its meeting. This is the second consecutive meeting where the SNB decided not to change the rate, considering some weakening of inflationary pressure.
The SNB leadership emphasized that they will continue to closely monitor inflation and adjust monetary policy if necessary.
In Switzerland, inflation slowed to 1.4% in November, which is the lowest level since October 2021. SNB forecasts for 2023 suggest an average inflation rate of 2.1%, 1.9% in 2024, and 1.6% in 2025. Also projected is a 1% GDP growth for Switzerland in 2023 and 0.5-1% in 2024.
In currency terms, the Norwegian krone strengthened: it rose 0.7% against the US dollar and 1.9% against the euro as of 13:00. The Swiss franc, in turn, slightly strengthened against the dollar by 0.1%, but lost 0.2% against the euro.