Norway’s Key policy rate increased to 1.50 per cent

Norges Bank’s Executive Board. From left: Liselott Kilaas, Vivi Lassen, Asbjørn Rødseth, Svein Gjedrem, Jan F. Qvigstad, Øystein Thøgersen og Brit K. Rugland.

Norges Bank’s Executive Board decided today to increase the key policy rate by 0.25 percentage point to 1.50 per cent.

“Inflation has been slightly higher than expected. Unemployment is considerably lower than previously projected. The global economy is in a deep downturn, but there are signs of renewed growth. Activity in the Norwegian economy has picked up more rapidly than expected. The Executive Board considered the alternative of increasing the key policy rate at the previous monetary policy meeting. Developments indicate that it is appropriate to raise the key policy rate now,” says Governor Svein Gjedrem.

The Executive Board’s strategy is that the key policy rate should be in the interval 1¼ – 2¼ per cent in the period to the publication of the next Monetary Policy Report on 24 March 2010, unless the Norwegian economy is exposed to new major shocks.

“The analyses in Monetary Policy Report 3/09 indicate that the key policy rate should thereafter be raised gradually,” says Governor Gjedrem.

Source: Norges Bank

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