Norges Bank is keeping the key interest rate unchanged at 0.5 percent and expects it will remain at current levels in the near future.
The decision, which became official on Thursday morning, is as most analysts had expected.
“The outlook for import growth among Norway’s trading partners is somewhat weaker than in June and expected key rates have fallen slightly also.
Oil prices are at about the same level as before the summer, while the krone has strengthened somewhat. Premiums in the Norwegian money market has increased and has been higher than projected, “are the reasons given by Norges Bank.”
“Inflation in Norway has been unexpectedly high in recent months. There is also signs that growth in the Norwegian economy is picking up slightly faster than projected in June.
House price inflation has picked up and has been higher than expected.
Low interest rates can contribute to the rise in house prices which remain high and increase the vulnerability of the financial system. On the other hand, growth in the Norwegian economy moderate, and capacity utilization is below the normal level.
Low costs and a somewhat stronger krone means that inflation is likely to decline gradually.
– We are now considering the prospect, the key rate will most likely remain at current levels in the near future, says Governor Øystein Olsen.
Source: NTB scanpix / Norway Today