Norges Bank lowers the benchmark rate to 0.50% and opens the door to enter negative types – Economy and Business online

Norges Bank lowers the benchmark rate to 0.50% and opens the door to enter negative types

on 17 March 2016
Economics and Business Online
Future Value

the interest rate applied to the loan facility by the Norwegian central bank will stand at 1.50%, while the rate will be imposed on the reserves of -0.50%.
 

Norges Bank, the Norwegian central bank has reacted to deteriorating global growth prospects and the general fall in interest rates in other countries with a decrease of 25 basis points of the benchmark rate, which will be placed at 0.50%, warning that can further cut the rate if you exclude the option of entering negative types.

in instead, the interest rate applied to the loan facility by the Norwegian central bank will stand at 1.50%, while the rate will be imposed on the reserves of -0.50%.

” the growth outlook for the Norwegian and global economy have weakened and is expected inflation to moderate further, so that the board has decided to lower the benchmark rate, “said central bank governor, Oystein Olsen.

in fact, the institute issuing Norwegian has explicitly recognized that the Executive Board of Norges Bank “does not exclude the possibility that the reference rate may be negative” if the Norwegian economy is exposed to ” external shocks “.

However, the company admits that the types of increasingly lower interest rates increase the vulnerabilities of the financial system and points out that, as the reference rate approaches its lower limit, increase uncertainties about the effects of monetary policy, so it is necessary to act “with utmost caution” when setting interest rates.