Key policy rate unchanged at 2.25 per cent
Norges Bank's Executive Board decided today to keep the key policy rate unchanged at 2.25 per cent. The projections in Monetary Policy Report 2/11 suggest that the interest rate should be raised gradually through the autumn.
The Norwegian economy is faring well, and unemployment is declining. Inflation is low, but is likely to pick up gradually. “The key policy rate was raised in May and is kept unchanged at this meeting, and the key policy rate is still projected to increase gradually through the second half of 2011,” says Deputy Governor Jan F. Qvigstad.
“Sovereign debt problems in Greece and other European countries have caused renewed financial turbulence, with the result that equity prices have fallen and long-term yields are again very low. However, global economic growth seems to be maintaining its momentum. We assume that the debt problems facing Greece will be resolved without significant spillover effects on other countries", says Deputy Governor Qvigstad.
The Executive Board also decided at its meeting that the key policy rate should be in the interval 2¼–3¼ per cent in the period to the publication of the next Monetary Policy Report on 19 October 2011, unless the Norwegian economy is exposed to new major shocks.
For further information, see “The Executive Board’s assessment” in the June 2011 Monetary Policy Report.
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