Norway is the first European nation to raise rates, and the third worldwide. The 25 basis points increase raised the rate to 1.50% and out of the record lowest interest rate. Economic fundamentals have been strong in Norway, and made the decision much easier for the Norges Bank. Exporters will be hit by the appreaciation of the local currency as its rate differential begins to look attractive for investment.
ScandinaviaÃ¢â‚¬â„¢s only non-European Union member came out of recession in the second quarter after investment in its petroleum industry, a stimulus package equivalent to 4.7 percent of gross domestic product and record-low borrowing costs fueled domestic demand. Prime Minister Jens Stoltenberg, whose coalition government was re-elected last month, has pledged to raise next yearÃ¢â‚¬â„¢s spending in excess of national fiscal guidelines even after recovery took hold.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.