The interest-rate game / News / The Foreigner

The interest-rate game. If one thing is certain, it’s uncertainty about the Norwegian interest-rate According to Dagens Næringsliv (DN.no), the three-month Nibor rate fell to 2.97 percent on Tuesday morning. On Monday morning, the interest-rate was 3.06 percent, but fell slightly during the course of the day. The last time that the Norwegian money-market rate was under three percent, was at the end of May in 2006.But watch the rate of inflation Although the Norwegian Central Bank’s basic rate of interest is 2.5 percent at the moment, it was higher food and clothing-prices that made the consumer price-index rise by 0.8 percent from January to February of this year, according to NA24. This is something that the economists didn’t expect.

interest-rates, norwegian, economy, cuts, inflation



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The interest-rate game

Published on Tuesday, 10th March, 2009 at 23:35 under the news category, by Michael Sandelson   .

If one thing is certain, it’s uncertainty about the Norwegian interest-rate

Norwegian currency
Norwegian currency
Photo: chezzzers/IStockphotos


Under three percent

According to Dagens Næringsliv (DN.no), the three-month Nibor rate fell to 2.97 percent on Tuesday morning. On Monday morning, the interest-rate was 3.06 percent, but fell slightly during the course of the day. The last time that the Norwegian money-market rate was under three percent, was at the end of May in 2006.

But watch the rate of inflation

Although the Norwegian Central Bank’s basic rate of interest is 2.5 percent at the moment, it was higher food and clothing-prices that made the consumer price-index rise by 0.8 percent from January to February of this year, according to NA24. This is something that the economists didn’t expect.

“The figures were indeed higher than expected. This shows that the effect of a weak krone means that we won’t get any help from lower import prices”, the chief economist in Sparebank 1 Group Elisabeth Holvik told them.

And Erik Bruce, a senior economist in Nordea Markets, had this to say:

“I believe that the Norwegian Central Bank would like to see inflation fall further, and this is something that will hold the interest-rate higher, all things being equal.”

The good news

It wasn’t all doom and gloom today though; Oslo stock-exchange ended the day up 4.6 percent after two encouraging pieces of news, according to dagbladet.no, The first was that the head of the Central Bank of America, Ben Bernanke, announced that he will not let the large financial institutions go under. And the second was the head of Citigroup sent a letter to all of the employees painting a rosier picture of the stock-market than had been expected.



Published on Tuesday, 10th March, 2009 at 23:35 under the news category, by Michael Sandelson   .

This post has the following tags: interest-rates, norwegian, economy, cuts, inflation.





  
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