Norway's central bank left its key interest rate unchanged in June for the eight consecutive session, citing weaker-than-expected activity, higher-than-projected inflation and a weaker krone.
The Executive Board decided to keep the key policy rate unchanged at 1.5 percent, the Norges Bank said in a statement on Thursday. The move was in line with expectations.
Low interest rates abroad are also leading to the lower policy rate in Norway, the bank said. However, it pointed out that there is a substantial spread between the key policy rate and the interest rates facing households and enterprises.
Weaker global as well as domestic growth, near-normal capacity utilization in the country and slow wage growth suggest that it will take longer for inflation to move up towards the inflation target, the bank said.
"The analysis suggest that the key policy rate be kept lower than projected earlier," Norges Bank Governor Oystein Olsen said.
"There are prospects that the key policy rate will remain at the current level, or somewhat lower, in the year ahead."
The Executive Board also decided that key policy rate should be in the interval 1 percent - 2 percent till September 19, when the next inflation report is due, unless the Norwegian economy is exposed to new major shocks.
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