Norges Bank retains key interest rate unchanged at 0.5%

Interest rateNorges Bank. CEO Øystein Olsen. Photo Norges Bank

Key interest rate unchanged at 0.5%

 

The central bank’s chief, Øystein Olsen, announced on Thursday that Norges Bank’s Executive Board has decided that the key interest rate will remain at the record low of 0.5%.

The decision is completely in line with analysts’ expectations in advance of the announcement.

The interest rate has been at 0.5% since March of last year.

‘The outlook and risk scenario for the Norwegian economy has not seemed to change significantly since the release of the previous monetary policy report. Therefore, we will keep the key rate unchanged at this meeting,’ said Olsen.

In Norges Bank’s monetary policy report in March, the Executive Board’s assessment foresaw a need for continuing expansionary monetary policy.

Capacity utilization in the Norwegian economy was considered to be below normal levels, and inflation was expected to run between 1 and 2% over the course of the next few years.

The Executive Board considered that the key rate would more than likely be at 0.5% in the near future, the bank wrote in a press release.

The twelve-month growth in consumer prices, adjusted for tax changes, and excluding energy products (CPI-ATE), was 1.7% in March, as had been expected in the previous monetary policy report.

Registered unemployment has decreased, and is lower than had been previously estimated. The krone rate has weakened, while the estimated money market rates of trading partners have fallen, according to Norges Bank.

 

Source: NTB Scanpix / Norway Today

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