Norway’s central bank left its key interest rate unchanged at zero, as widely expected, on Thursday, after a surprise cut in May.
The Monetary Policy and Financial Stability Committee unanimously decided to retain the policy rate at zero percent, Norges Bank said in a statement.
In May, the rate was cut from 0.25 percent after a cumulative 125 basis points reduction in two extraordinary sessions in March from 1.50 percent.
The bank reiterated that the interest rates are set to remain unchanged over the next couple of years, followed by a gradual rise.
“The Committee’s assessment of the outlook and balance of risks suggests that the policy rate will most likely remain at today’s level for some time ahead”, Governor Oystein Olsen, said.
The bank noted that activity has picked up in recent months but remained lower than prior to the [coronavirus][1] pandemic.
Unemployment remained high despite a decline. Underlying inflation stayed above the inflation target. The krone appreciation and prospects for low wage growth suggest that inflation will moderate further out, the bank said.
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