Stronger NOK over the course of 2023 as Norges Bank will do what it takes to control inflation – Commerzbank

The Norwegian Krone is under depreciation pressure following surprisingly high inflation. However, economists at Commerzbank expect the NOK to recover over the coming months on the back of hawkish Norges Bank’s statements.

Norway March inflation came in stronger than expected

“Contrary to expectations the inflation rate continued to rise in Norway in March. The Norwegian Krone eased to a new annual low at EUR/NOK levels above 11.50 and the Krone is thus amongst the worst performers of the year.”

“It would seem that traders now want to see a clear reversal in inflation rates before the Krone can benefit from Norges Bank’s hawkish comments.”

“We remain optimistic that in the end Norges Bank will do what it takes to control the inflation outlook and expect a stronger NOK over the course of the year.”