FRANKFURT (MNI) – Norwegian banks see credit demand from
corporations rising in the period ahead, while household credit demand
will remain unchanged, the country’s central bank, the Norges Bank,
reported Thursday.
Norges also said in its quarterly report on lending that banks
reported “approximately unchanged credit standards for households and
enterprises in 2010 Q4.”
“Banks also expect unchanged credit standards for households and
enterprises in 2011 Q1,” after demand for both rose in the last quarter
of 2010, the central bank wrote.
“Banks expect unchanged household credit demand and higher
corporate credit demand in the period ahead,” the bank assessed.
Banks had foreseen unchanged credit demand for households and
enterprises in Q4 versus Q3, according to the central bank’s October
bank lending survey. At that time, banks also reported that they
expected somewhat higher corporate credit demand beyond Q4 of last year.
At its last meeting December 15, Norges Bank left its key policy
rate at 2%, where it has stood since May 5, 2010.
While the low interest rate levels have not spawned an increase in
household debt growth thus far, house prices and consumer spending has
recently accelerated, Norges wrote after its last meeting.
“The consideration of guarding against the risk of future financial
imbalances that may disturb activity and inflation somewhat further
ahead suggests that the key policy rate should not be kept low for too
long,” it also said at that time.
The central bank targets core inflation at 2.5%. Last year, core
inflation was only 1.4%, leading some experts to believe that the bank
would likely hold off on any additional rate hikes until the second
quarter of 2011.
Its next rate decision will be announced January 26.
–Frankfurt: +49-69-720142, tbuell@marketnews.com
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