Norway Signals Reduction After Unexpectedly Holding Rate

Norway’s central bank unexpectedly left interest rates unchanged and signaled another cut to protect the economy against a plunge in oil prices. The krone surged.

The overnight deposit rate was kept at 1.25 percent, the Oslo-based bank said. The decision was forecast by only one of 19 economists surveyed by Bloomberg, while the remainder estimated a reduction. The bank predicted its rate may drop to as low as 0.95 percent in the first quarter of next year, versus a December forecast of 1.13 percent. The krone gained as much as 3.1 percent against the euro, the most since 2008, and traded at 8.8621 as of 12:38 p.m.