Lower policy rates from the ECB are likely to make an impact on Norges Bank’s rate decision at its policy meeting next Wednesday. Until recently, we expected the bank to stay put at the meeting (and keep rate on hold for a prolonged time), but now see a cut looming.
For starters, the rate path in the March MPR saw a 50/50 chance for a 25bp cut of the key 1.50% deposit rate at this juncture, and chances for such a cut has increased following the ECB’s move.
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