The Executive Board of the Norwegian Central Bank (Norges Bank) decided Wednesday to keep the key policy rate unchanged at 2 per cent.
“Underlying inflation is around 1½ per cent, approximately as projected. Both the consideration of bringing consumer price inflation up to target and the consideration of stabilising developments in output and employment imply a low key policy rate”, says the Central Bank's new Governor Øystein Olsen.
He says that activity in the global economy is increasing and commodity prices are rising, but the outlook for Europe remains highly uncertain.
Interest rates abroad have risen since October, but are still low.
In Norway, the rise in house prices and consumer spending have picked up. The consideration of guarding against the risk of future financial imbalances that may disturb activity and inflation somewhat further ahead suggests that the key policy rate should not be kept low for too long, Olsen says.
On the other hand, a strong krone may lead to inflation becoming too low. “An overall assessment of the outlook and the balance of risks suggests that the key policy rate be left unchanged at this meeting”, says Governor Olsen.
(NRK/Press release)
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