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Brexit, US election might have enough impact to change monetary policy in one of the world’s top oil nations

The Norwegian central bank is optimistic on the economic impact of the U.K.'s decision to leave the EU, but Governor Øystein Olsen has told CNBC that a Brexit might well change the course of monetary policy in his country.

Olsen said Tuesday that the bank is "closely" following international developments, such as Brexit and the upcoming U.S. presidential election, which could "marginally" change its monetary policy.


An offshore oil and gas rig near Stavanger, Norway.
Nerijus Adomaitis | Reuters
An offshore oil and gas rig near Stavanger, Norway.

The Norges Bank kept its rates on hold at 0.5 percent last week, despite concerns over increasing house prices. But Olsen refused to answer questions on whether its era of ultra-loose policy was coming to an end.

"As a result of Brexit there are new challenges for Britain, politically but also in the economic area … Looking forward I choose to be optimistic on behalf of the British economy, but there are a number of matters that need to be arranged," Olsen said, mentioning new trade deals as example.

Norway has a few economic issues of its own to fix. The Norwegian economy has suffered a severe setback on the back of falling oil prices, reaching a GDP (gross domestic product) rate of 1 percent in 2015 – the lowest since the financial crisis.

"The declines in oil prices and offshore investment have taken a toll on the Norwegian mainland economy," the International Monetary Fund said in a report last July.

According to IMF projections, Norway should register growth of 1.1 percent this year and 1.7 percent in 2017.

"A recovery should take root in 2017 alongside a gradual upturn in oil prices and a slowing of the pace of decline in oil investment," it added.

Statoil announces investment

Meanwhile on Tuesday, Statoil - the Norwegian multinational energy firm which is majority owned by the government - announced it was investing 5.5 billion Norwegian krone ($670 million) in Norway's Trestakk oil and gas fields. The investment will cost the company 50 percent less than originally planned.

"By rethinking our concept along with license partners and suppliers, we have arrived at a solution that costs almost 50 percent less than the original concept," Statoil said in a statement.

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