14 December 2023 at 10:05 The krone strengthens after the interest rate hike The krone is immediately strengthened after the interest rate decision. Norges Bank surprised the market by raising the interest rate by 0.25 percentage points to 4.5 per cent, and says the interest rate will remain there until next autumn. One euro became about 20 øre cheaper and now costs NOK 11.59. Senior economist Dane Cekov at Nordea believes the interest rate decision shows that Norges Bank is serious about getting the weak krone exchange rate under control. – This is about the krone exchange rate. The krone has become 4.5 per cent weaker since the last interest rate meeting in September. It is clear that Norges Bank is now serious, says Cekov to news. Cekov explains why Norges Bank may think that an interest rate hike was necessary: - With the weaker krone, everything we import becomes more expensive and then the krone exchange rate creates price pressure. With an American central bank and the European central bank announcing interest rate cuts next year, the krone exchange rate should stabilize and become stronger, says Cekov. He believes the krone must be under control before Norwegians can enjoy interest rate cuts. – This will take longer in Norway than abroad, he says.
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