Norway’s Central Bank Cuts Rates, Stocks Surge 5%

on Mar 20, 2020
Updated: Mar 21, 2020
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  • Norges cuts interest rates by 0.75% to a historic low of 0.25%
  • A week ago, the first cut by 50 basis points was made
  • Norway’s OBX index trades 5% higher on the day

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Norges Bank, Norway’s central bank, slashed its interest rates to a record low 0.25% from 1.0% in a second attempt to limit the negative impact of the coronavirus outbreak. A week ago, Norges Bank cut rates by 50 basis points.

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“Since Norges Bank cut the policy rate last week, the situation in the Norwegian economy has continued to worsen. Norges Bank will continually consider measures to ensure that the policy rate passes through to money market rates. The Committee does not rule out a further rate cut,” the central bank said in a statement.

The decision, which was made unanimously, helped Norway’s benchmark index OBX 5% higher after it posted a 4-year low earlier this week. A rate cut also helped USD/NOK erase earlier gains as it trades positively on the day.

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