"The key policy rate is being kept at a low level because inflation is low and global interest rates are at very low levels," says Governor Øystein Olsen.

Growth among Norway's trading partners is weak and the uncertainty surrounding developments in the international economy is elevated. Measures by a number of central banks have, nevertheless, contributed to easing financial market tensions recently.

Growth in the Norwegian economy is solid and capacity utilisation is somewhat higher than normal. The krone has appreciated. Lower premiums in money and bond markets have reduced banks' funding costs. At the same time, interest rates on banks' loans to households and enterprises have remained unchanged.

"Developments in the Norwegian economy give reason to believe that inflation will gradually pick up. The analyses in this Report suggest that the key policy rate should be kept at today's level into next year, followed by a gradual increase towards a more normal level. The forecast for the key policy rate in 2013 is slightly lower than the June forecast," says the Governor.

At the meeting, the Executive Board decided that the key policy rate should be in the interval 1% – 2% until the publication of the next Report on 14 March 2013, unless the Norwegian economy is exposed to new major shocks.

For further information, see "The Executive Board's assessment" in the October 2012 Monetary Policy Report. (PDF, 160 kB)

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