FXStreet (Delhi) – Research Team at TDS, notes that the Norges Bank left rates on hold, but the statement and Monetary Policy Report took on a very dovish tone. Key Quotes “The Executive Board has all but committed to another cut (or two) in the first half of 2016, saying that even if the current outlook transpired, a lower policy rate would be warranted. Projections were also downgraded, with lower growth and higher unemployment expected in coming years.” “The Norges Bank kept its key policy rate on hold at 0.75% today, but the accompanying statement and Monetary Policy Report were about as dovish as they could get, with a downward revision to growth, upward revision to unemployment, and a weaker path for policy rates over 2016 and beyond.” “The Norges Bank’s forecast for the key policy rate shows that it is now expected to bottom out at 0.39% by the end of 2016 and to remain there until late-2017. This is a level consistent with 100% chance of one more cut, and about a 50% change of another. In fact, the Executive Board went so far as to say that: The Executive Board’s current assessment of the outlook for the Norwegian economy suggests that the key policy rate may be lowered in the first half of 2016.” “And Governor Olsen suggested at the press conference that this probability was greater than 50%. To us, this all but guarantees that unless we see a sharp turnaround in the economy between now and March (very unlikely), we will see another 25bps cut at the Norges Bank’s next meeting, and one more in May.” For more information, read our latest forex news.