Norway's central bank has kept its key policy rate unchanged at 1.5% following the latest meeting of its Executive Board.
Norway’s central bank has kept its key policy rate unchanged at 1.5% following the latest meeting of its Executive Board.
Norgest Bank said that although the domestic economy in some respects was performing stronger than expected, the level of uncertaintly linked to ongoing developments in Europe meant that it was prudent to leave interest rates unchanged.
Governor Øystein Olsen (pictured) noted that economic growth among trading partners is expected to be lower than previously forecast, while central bank rates in many countries remain close to zero. Low inflation in other countries is also spilling over into Norway, but inflation will increase Olsen said.
“The analyses in [the latest] Monetary Policy Report imply a key policy rate at about today’s level towards the end of 2012. Thereafter, the key policy rate is projected to rise gradually towards a more normal level. However, there is considerable uncertainty surrounding economic developments ahead.”
The Bank’s Executive Board decided that the key policy rate should be in the range of 1% – 2% until the publication of the next Report on 31 October 2012, unless the Norwegian economy is exposed to new major shocks.