Central Bank May Cut Benchmark Rate to Revive Growth

Feb. 3 (Bloomberg) — Norway’s central bank will probably cut the benchmark interest rate by half a percentage point tomorrow to help revive the economy of the world’s fifth-largest oil exporter.

Oslo-based Norges Bank will lower the overnight deposit rate to 2.5 percent, according to 12 of 13 economists surveyed by Bloomberg. One economist forecast a 1 percentage-point reduction. The bank will announce its decision tomorrow at 2 p.m. in Oslo. 

The mainland economy, which excludes shipping and oil, faces contraction for the first time in 20 years, according to Nordea Bank AB, the biggest Nordic lender. As waning demand damps inflation, the central bank is focusing on kick-starting economic growth and has signaled it will cut rates from a two-year low after slashing borrowing costs by 2.25 points since October. 

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