The National Bank has lowered its interest rates by 0.25 percentage points, mirroring a similar move by the European Central Bank (ECB). This decision aligns with the fixed exchange rate policy that ties the krone to the euro, necessitating close coordination of interest rates.

The leading interest rate, specifically the certificate of deposit rate, is now set at 1.60 percent, while the lending rate has been adjusted to 1.75 percent.

The certificate of deposit rate influences the interest earned by mortgage and financial institutions when they purchase certificates of deposit from the National Bank. This, in turn, can affect the interest rates offered to customers by these institutions.

Earlier in the day, the ECB reduced its deposit rate by 0.25 percentage points, bringing it down to two percent. This marks the eighth interest rate cut implemented by the ECB within the past year.

The National Bank’s decision to follow the ECB’s lead is consistent with its established practice, stemming from the fixed exchange rate policy that maintains the krone’s alignment with the euro. This policy requires interest rates to remain closely aligned between the two entities.