Norges Bank has said it plans to raise rates in the third or fourth quarter of 2021, likely making it the first among G10 central banks to increase the cost of borrowing after the outbreak of the COVID-19 pandemic.
“In the committee’s current assessment of the outlook and balance of risks, the policy rate will most likely be raised in the latter half of 2021,” Governor Oeystein Olsen said in a statement.
The central bank reiterated that it wants to see clear signs of economic recovery from the COVID-19 pandemic before any rate hike takes place.
“The first phase of the government’s plan for the reopening of society has been implemented, and much of the adult population in Norway is expected to be vaccinated by the end of summer,” Norges Bank said.
“This suggests that economic activity will pick up through the year,” it added.
Norway currently expects all adults to be offered at least one dose of a COVID-19 vaccine by late July, the government has said. (Reporting by Terje Solsvik and Victoria Klesty; editing by Gwladys Fouche)