Interest-rate cut by a half percent / News / The Foreigner

Interest-rate cut by a half percent. Economists proven right. As expected by 7 out of 12 economists, the Norwegian Central Bank cut the base-rate to 2 percent at Wednesday’s monthly meeting. This is the lowest it’s been for years. The bank gives the reason for its decision as being the deterioration of the outlook for the global economy. “In order to mitigate the impact in Norway the interest-rate is being reduced”, Jan F. Qvigstad, the bank’s deputy governor says.Banks follow suit

interest, rate, norwegian, central, bank, cut, gjedrem



The Foreigner Logo

The Foreigner is an online publication for English speakers living or who have an interest in Norway. Whether it’s a glimpse of news or entertainment you’re after, there’s no need to leave your linguistic armchair. You don’t need to cry over the demise of the English pages of Aftenposten.no, The Foreigner is here!

Norske nyheter på engelsk fra Norge. The Foreigner er en engelskspråklig internett avis for de som bor eller som er interessert i Norge.

Google+ Google+ Twitter Facebook RSS RSS



News Article

LATEST:

}

Interest-rate cut by a half percent

Published on Thursday, 26th March, 2009 at 23:35 under the news category, by Michael Sandelson   .
Last Updated on 26th March 2009 at 23:57.

Economists proven right.

Percentage sign down
Percentage sign down
Photo: Lukiyanova Natalia/frenta


Efforts to reduce impact on Norwegian economy

As expected by 7 out of 12 economists, the Norwegian Central Bank cut the base-rate to 2 percent at Wednesday’s monthly meeting. This is the lowest it’s been for years. The bank gives the reason for its decision as being the deterioration of the outlook for the global economy.

“In order to mitigate the impact in Norway the interest-rate is being reduced”, Jan F. Qvigstad, the bank’s deputy governor says.

Banks follow suit

On the same day that it was announced, both Nordea and DnB Nor reduced their rates by the same amount. There decision was despite the fact that they wouldn’t commit themselves before the meeting had taken place. Yesterday, Postbanken, and two of the local banks in Rogaland, Sandnes Sparebank, and Sparebank 1 SR-Bank followed suit.

Safe as houses?

So what does this mean for the housing-market? Steinar Juel, Nordea’s chief economist is

“in no doubt that the house market will pick up again”, he told Dagens Næringsliv (DN.no).

And whilst people with mortgages can celebrate for now, it may well be a short party. Unemployment is quite low at the moment and the Central Bank expects it to rise rapidly, but Juel estimates that approximately 95 percent will keep their jobs. It’s these people that he is worried about. His opinion is that a cut in interest-rates will mean higher spending instead of saving. Higher spending will lead to an even bigger fall in house-prices next time, leading in turn to an even bigger fall in people’s spending.

Should prices not pick up, however, the Central Bank is prepared to cut the interest-rates further. In its first monetary policy report of the year, Gjedrem believes that the rate could be 1.04 percent in December this year.




Published on Thursday, 26th March, 2009 at 23:35 under the news category, by Michael Sandelson   .
Last updated on 26th March 2009 at 23:57.

This post has the following tags: interest, rate, norwegian, central, bank, cut, gjedrem.





  
Do NOT follow this link or you will be banned from the site!