BRUSSELS (MNI) – Norway’s central bank, the Norges Bank, said
Wednesday it had decided to leave its key policy interest rate on hold
at 2.25%, citing weaker global economic prospects, turbulence in
financial markets, and their affect on the outlook for the Norwegian
economy.
“The prospects for the world economy have weakened considerably in
the course of summer. External developments and the turbulence in
financial markets are also affecting the domestic outlook. Against this
background, we have chosen to leave the key policy rate unchanged at
this meeting,” Deputy Governor Jan F. Qvigstad said in a written
statement released by the bank.
The central bank did not project the future trajectory of interest
rates as it frequently does in its interest rate policy announcements.
“There is an unusually high level of uncertainty surrounding the key
policy rate ahead,” it said.
“If price and cost inflation moves up and growth prospects improve,
the key policy rate may be raised,” Norges added. On the other hand, “if
the Norwegian economy is exposed to new major shocks, with a further
deterioration in the outlook for growth and inflation, the key policy
rate may be reduced.”
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