By Scott Kanowsky
Investing.com — Norway’s central bank hiked interest rates by 50 basis points on Thursday, becoming the latest global monetary policy maker to move aggressively in a bid to rein in soaring inflation.
Norges Bank said the unanimous decision to raise its policy rate to 1.25% from 0.75% came amid worries that prices may continue to rise due in part to tight spare capacity in the Norwegian economy and a weaker local currency.
“A faster rate rise now will reduce the risk of inflation remaining high and the need for a sharper tightening of monetary policy further out,” said Norges Bank Governor Ida Wolden Bache in a statement.
The central bank added that borrowing costs will “most likely be raised” even further to 1.5% in August. It also revised up its monetary policy forecast, saying it now predicts a potential uptick in interest rates to around 3% by summer 2023.
The move comes after a slew of central banks around the world – including the Federal Reserve, Bank of England, and the Swiss National Bank – unveiled rate hikes recently to cool red-hot inflation. Meanwhile, the European Central Bank has also signaled its intention to increase borrowing costs at its July meeting.
Norway’s Central Bank Hikes Rates by 50 Basis Points Amid Inflation Fears