May 15, 2019 / 7:03 AM / 4 months ago

Norway policy interest rate to double by end-2020 -Nordea Markets

OSLO, May 15 (Reuters) - Norway’s central bank will likely raise its key policy interest rate four more times by the end of 2020, doubling it to 2.0% from 1.0% currently, Nordea Markets predicted on Wednesday.

The brokerage had previously expected Norges Bank’s policy rate to hit 1.75% next year.

The Norwegian economy is growing at its fastest speed in seven years thanks to a weak currency and booming offshore oil and gas investments. Norges Bank last week said it planned to hike rates in June, the third increase since September.

“Norges Bank is currently the only central bank in the Western world to hike rates. That’s a sign of strength,” Nordea Norway’s Chief Economist Kjetil Olsen wrote in the bank’s latest report on the global economy.

Norwegian exports remain shielded from Europe’s slowdown thanks to the relative weakness of the crown against the euro, and for the time being the currency is likely to only show a moderate strengthening.

“We’ll have to see how long it takes before markets realise that we’re different from other countries,” Nordea’s Olsen wrote. (Reporting by Terje Solsvik, editing by Gwladys Fouche)

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