– Norwegian Krone Weakens: Impact on Inflation and Interest Rates

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A record weak krone means that it will take time for inflation to come down in Norway (Julia Skretting, researcher in the Group for Macroeconomics, Statistics Norway) (DN)
The development of the krone exchange rate will have a significant impact on inflation going forward. A record weak krone increases import prices, but eventually more of the price increase from the weak krone comes from higher export prices, which gives wage growth. In the event of a continued weak or further weakened krone, and without a monetary policy response, wage growth will contribute to maintaining a higher level of inflation in the coming years. The sea

The krone strengthens after the interest rate announcement (E24)
The US central bank chose on Wednesday evening to keep interest rates unchanged. At the same time, the Federal Reserve surprised by announcing three interest rate cuts next year. The dollar weakened sharply after the news, so that it now costs NOK 10.76. It is almost 20 cents cheaper than just before the decision was announced. At the same time, the krone has strengthened significantly against the euro. One euro now costs NOK 11.72. The sea

Thinks the krone will be decisive for the interest rate: – Is the elephant in the room (E24)
Most economists expect that Norges Bank will keep interest rates steady, but it may take some time before the first rate cut. The krone will be decisive, according to the chief economist. – The crown is the elephant in the room here, which has been talked about too little. Everyone knows that it has a direct consequence on imported inflation going forward, says Olav Chen in Storebrand. On Thursday, Norges Bank announces the new interest rate decision and most economists now expect that the key interest rate will remain unchanged at 4.25 per cent. – What drives my interest rate forecast is the krone exchange rate, says chief economist Jan L. Andreassen at Eika Gruppen. The sea

Lowest Nibor since July (Finansavisen)
The Norwegian money market interest rate is now falling. That could mean cheaper loan rates, believes Magne Østnor in DNB Markets.. The Norwegian money market interest rate Nibor finished its rise already in July. After this, the three-month interest rate has been completely flat at just over 4.70 per cent, although Norges Bank has not only raised the key interest rate twice in the meantime, but also announced a possible final increase on Thursday this week. On Wednesday, the interest rate was below 4.60 percent. The decline will probably continue, says currency strategist Magne Østnor at DNB Markets. NIBOR is often considered to be the most important factor behind Norwegian lending rates. For business customers, the loan interest rate is usually fixed as Nibor plus a given credit surcharge, depending on the borrower’s industry and creditworthiness. For mortgages, the level of Nibor often means more than the level of the key interest rate. – Does the Nibor fall mean that there may be a move towards lower interest rates on the banks’ lending? – We see that Swedish banks have started to offer lower loan interest rates to their customers. This development is not completely different, says Østnor, who emphasizes that he is speaking here as an analyst. The sea

Economists believe in unchanged interest rates (Finanasavisen)
On Thursday, Norges Bank will announce the new interest rate decision. Most economists expect the central bank to keep the key interest rate unchanged at 4.25 percent. The sea

The interest rate peak has been reached: That’s why Norges Bank is not raising more (Gunnar Stavrum’s manager, Nettavisen)
Central bank governor Ida Wolden Bache leaves the interest rate unchanged, and warns of great uncertainty about the way forward. read more

The US central bank expects three interest rate cuts next year (E24)
The interest rate in the US is kept unchanged, but the prospect of more interest rate cuts in 2024 weakens the dollar sharply. – This makes Norges Bank’s job easier, says chief economist Kyrre M. Knudsen at SpareBank 1 SR-Bank. He points out that the Fed is jacking down the interest rate outlook “quite a lot”. – For Norway, this is good, in the sense that many feared that the Fed would keep more on the interest rate path. Seen in isolation, this makes Norges Bank’s job even a little easier and that the interest rate can also remain stable here at home, he says. The sea

These foods are now 40 per cent more expensive than two years ago (NTB)
The price of salmon, tomatoes and berries has risen by more than 40 per cent in two years. The sea

2023 – a year of mourning for everyone with loans (E24)
High price growth, high wage growth, high interest rates. An ordinary family has received NOK 50,000–60,000 less to live with this year alone. The sea

Terje Aasland on electricity prices up to NOK 3: – We do what we can (Finansavisen)
– We are doing what we can to get more renewable energy production in place, says Oil and Energy Minister Terje Aasland (Ap). But this week the tax on power production increased. – You came up with the high price contribution last year, and now there will be basic rent tax on wind power. Surely increased tax is not the way to go if you want to have increased production? – The high price contribution last year was completely legitimate and absolutely necessary for us to carry out. We were in a situation where we could not use more oil money. We had to redistribute, and we took away from those who had profited the most from the price situation in the energy sector. The sea

Sets up committee to crack the “struggling” code in new pension system (E24)
Labor Minister Tonje Brenna (Ap) asks LO and NHO to find out how a new pension system will work for those with the heaviest jobs. The sea

Norway will benefit from nuclear power (Finansavisen)
Svein Harald Øygard continues his rage against Norsk Kjernekraft with straw man arguments and misleading claims, write Håvard Kristiansen and Jonny Hesthammer. The sea

The wind power settlement: – There is no champagne here (DN)
A significant improvement for new onshore wind power. But those who already own wind power will get a blow that can scare investors, say the players in the industry about the settlement at the Storting. The sea

Vedum demands cheaper loans for agriculture (Finansavisen)
The Ministry of Finance orders Finanstilsynet to lower the risk weight on loans to agricultural property from 100 to 50 per cent. The sea

Norwegian innovation support is in line with EEA rules, concludes Esa (NTB)
EFTA’s monitoring body Esa has concluded that the support schemes from Norsk Katapult do not contravene the EEA rules. read more

LO positive for changes in the banks’ capital requirements (NTB)
On Wednesday, the Ministry of Finance presented a package of measures which, among other things, includes changes to the banks’ capital requirements. LO is positive about the proposal. The package of measures from Finance Minister Trygve Slagsvold Vedum (Sp) aims to improve the framework conditions for small and medium-sized banks throughout the country. read more

130 people get a bridge to NOK 1.3 billion (Nettavisen)
There are currently around 130 permanent residents living on Ytre Sula, as well as a number of cottagers. The price tag for the bridge is a staggering NOK 1.3 billion. In practice, this means that the bridge costs 10 million tax kroner per inhabitant. read more

The Kredinor CEO’s departure must not stand in the way of the debt collection industry’s development (Rune Heimstad, chairman of Fair Collection) (Finansavisen)
The debt collection industry must reduce the fees for the largest claims. The sea

Former oil director resigns from Vår Energi after 11 months (Finansavisen)
The former oil director Ingrid Sølvberg has finished in Vår Energi: – It did not turn out as expected. The sea

We need capitalist media (Torbjørn Røe Isaksen, E24)
I light a tiny candle for Schibsted’s media going public. The sea

The NOK 110,000 billion question (Terje Erikstad, DN)
How can a gigantic loss of gas and oil be distributed in a “fair, orderly and reasonable” way? The sea

The Fed kept interest rates unchanged – sees three rate cuts next year (DN)
The American central bank is probably finished with interest rate hikes, and is now signaling three interest rate cuts in 2024: – I didn’t think this would happen, says the chief economist. – The Fed is perceived as “soft”, we can see that from the market’s immediate reaction. I didn’t think this would happen – the Fed is now much closer to the interest rate market than previously thought, says Sparebank 1 Markets’ chief economist Harald Magnus Andreassen. The sea

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Read also: This is what the newspapers write about Oslo Børs on Thursday 14 December

2023-12-14 05:37:06


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