Norway's central bank raises key policy interest rate
Norway's key policy interest rate was raised by 0.25 percentage points to three percent on Thursday by Norges Bank, the Scandinavian country's central bank.
Norway's key policy rate has been increased to three percent due to high inflation and economic activity, Norges Bank wrote in an announcement.
"The committee's assessment is that a higher interest rate is needed to curb inflation. The price increase is clearly above the target. Growth in the Norwegian economy is slowing, but activity is still high. The labour market is tight, and wage growth is on the rise," the announcement of the increase reads.
Ida Wolden Bache, governor of the central bank, said that the key policy rate would be raised again in May. Prior to Thursday, the last rate increase was in December.
The key policy rate being raised to three percent brings interest rates in line with the bank's initial target. However, this target has now been adjusted upwards to 3.5 percent, a figure the bank expects to reach this summer.
Although, it stated that the extent to which the key policy rate would rise further would depend on economic developments.
"If the krone becomes weaker than assumed, or the pressure in the economy persists, a higher interest rate than we currently estimate may be needed to bring inflation down towards the target. On the other hand, if inflation declines faster or unemployment is higher than expected, the interest rate may be lower than forecast," the central bank writes.
A higher key policy rate means more expensive loan and mortgage repayments for consumers.
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Norway's key policy rate has been increased to three percent due to high inflation and economic activity, Norges Bank wrote in an announcement.
"The committee's assessment is that a higher interest rate is needed to curb inflation. The price increase is clearly above the target. Growth in the Norwegian economy is slowing, but activity is still high. The labour market is tight, and wage growth is on the rise," the announcement of the increase reads.
Ida Wolden Bache, governor of the central bank, said that the key policy rate would be raised again in May. Prior to Thursday, the last rate increase was in December.
The key policy rate being raised to three percent brings interest rates in line with the bank's initial target. However, this target has now been adjusted upwards to 3.5 percent, a figure the bank expects to reach this summer.
Although, it stated that the extent to which the key policy rate would rise further would depend on economic developments.
"If the krone becomes weaker than assumed, or the pressure in the economy persists, a higher interest rate than we currently estimate may be needed to bring inflation down towards the target. On the other hand, if inflation declines faster or unemployment is higher than expected, the interest rate may be lower than forecast," the central bank writes.
A higher key policy rate means more expensive loan and mortgage repayments for consumers.
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