November 30, 2022

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Many banks are raising interest rates after the Norges Bank hike last week

Many banks are raising interest rates after the Norges Bank hike last week

norway bank Last Thursday came with a 0.25 percentage point jumpNorway’s key interest rate is now 2.25 percent.

At the same time, the central bank announced that there is likely to be another increase at the next meeting, which is also the last of the year, in December.

There is a lot of activity in the Norwegian economy, and unemployment is at a historically low level. Price inflation has picked up further and is clearly above our 2 per cent target. Central Bank Governor Ida Waldenbach said we are raising the interest rate to curb price inflation.

In the wake of Thursday’s rate hike, banks are now following suit, with DNB being the first to announce a rate hike. The bank raised the interest rate on mortgages and deposits by as much as 0.25 percentage points, according to a letter on Monday.

– On the back of the Norges Bank’s decision to raise its key interest rate by 0.25 percentage points at its November 3 interest rate meeting, the DNB decided to increase the interest rate on mortgages and deposits by up to 0.25 percentage points, says Ingerd Blekele Speten, head of personal markets at DNB at Stock market announcement.

The new rates are effective November 8 for new customers and December 19 for existing customers.

Several rate hikes

Shortly after the DNB announced an interest rate hike for its clients, KLP Banken wrote that it was also raising rates by 0.25 percentage points.

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At KLP, the interest rate change applies to new customers from November 7, while the change applies to existing customers from December 21.

– Higher key interest rates from the Bank of Norway and expectations of further increases contribute to higher borrowing costs for us. This is why we are increasing interest on mortgages and bank deposits, says Jorunn Ygre Storjohann, director of retail market at KLP Banken.

Jorunn Ygre Storjohann from KLP Banken.

Jorunn Ygre Storjohann from KLP Banken. (Photo: Skjalg Böhmer Vold/KLP)

It usually doesn’t take long before banks raise interest rates after Norges Bank changes its key rate. In both August and September, most of the major banks raised interest rates by 0.5 percentage point a few days after the rate decision.

Central Bank Governor Bash said at the press conference that the Norges Bank assumes that in the future banks will set mortgage rates somewhat lower than the Norges Bank’s rate hike. This is justified by the fact that banks have set interest rates on deposits lower than those of the Norges Bank.

Sparebanken Sør announced shortly before 1.30pm that it would raise the interest rate by 0.25 percentage point. Sparebank 1 SR-Bank also increased the interest rate on mortgages and deposits by up to 0.25 percentage points.

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