Norway's central bank announces second double interest rate hike

Frazer Norwell
Frazer Norwell - [email protected]
Norway's central bank announces second double interest rate hike
Norges Bank has decided to raise the key interest rate from 1.25 percent to 1.75 percent. Pictured is the Barcode district in Oslo, famous for its tall buildings. Photo by Carlo Alberto Burato on Unsplash

The key interest rate in Norway will rise by 0.5 percent to 1.75 percent, the second double rate hike in a row, Norges Bank announced Thursday. 


In line with analysts' predictions, Norway's central bank, Norges Bank, has opted to implement another double interest rate hike, following the one introduced in June. 

The bank announced that the key interest rate would rise from 1.25 percent to 1.75 percent. In June, the rate was also raised by 0.5 percentage points. 

Inflation rising higher than forecast and low unemployment were deciding factors in the bank deciding to raise the key interest rate by 0.5 percentage points for the second time in a few months. 


"There is a need for a clearly higher interest rate to reduce the pressure on the Norwegian economy and bring inflation down towards the target," Ida Wolden Bache, Governor of Norges Bank, said in the bank's announcement. 

She added that rising interest rates should help to reduce the risk of inflation rising to even higher levels and called for a tightening of monetary policy. 

Public broadcaster NRK's economics commentator Cecilie Langum Becker said that the rate hike would lead to monthly repayments of around 1,000 kroner more for a household with loans of around 3.5 million kroner

In September, leaders at the bank will convene for another meeting on interest rate hikes. The bank has said that the public must expect an interest rate on mortgages of around 4.5 percent during the next year. 

Bache is expected to speak about where she believes the Norwegian economy and interest rates are heading at a lecture at the political festival Arendalsuka on Thursday. 


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