Olsen says Norges Bank must tread carefully as it nears the zero lower bound
Effects of policy become less certain close to zero
The effects of monetary policy may become unpredictable as a central bank approaches the zero lower bound (ZLB), calling for greater caution, Norges Bank governor Øystein Olsen said on October 11.
So far, policy rate cuts have passed through to bank interest rates as expected, Olsen said in a speech at the BI Norwegian Business School. The policy rate is now 0.5% and the central bank has indicated it could go lower in future.
However, banks, enterprises and households may respond differently at
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