Norges Bank expected to stay on hold this week – BBH

According to analysts at BBH, the Norges Bank is seen leaving its monetary policy unchanged at its meeting later in the week.

Key Quotes

“The market had felt comfortable with ideas that Norway's central bank would leave the deposit rate at 0.5% when it meets on March 16. However, before the weekend, Norway reported a soft February CPI report, and it captured some imaginations.  It accelerated the krone's slide.  The euro rose 2.65% against the krone last week, the most in over a year.  It was pushing on an open door as the euro had already begun rallying against Nokkie and rose 1.1% against it the previous week, which at the time was the most since last August”.

“The 0.4% rise in February consumer prices was the largest increase since last September, but it was only half was what had been anticipated.  The year-over-year rate fell to 2.5% from 2.8%, and the core rate, which excludes energy and tax changes, fell to 1.6% from 2.1%.  The selloff in the krone, not just against the euro but on a trade-weighted basis in the last couple of weeks, takes pressure off the central bank to do something it does not really want to do”.