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Norway Central Bank Holds Key Rate As Expected

Norway's central bank kept its key interest rate unchanged again, at zero percent, and signaled that the rate will remain at the current level for some time ahead.

The Monetary Policy and Financial Stability Committee unanimously decided to retain the policy rate at zero percent, Norges Bank said in a statement.

Interest rates will be kept calm until there are clear signs that conditions in the economy are normalizing, Governor Øystein Olsen, said.

The economic recovery is slowed down by the increased infection and stricter infection control. Vaccination has got off to a good start and economic growth is set to pick up in 2021.

Underlying inflation was above target, but the strengthening of the krone since March and the prospect of low wage growth indicate that it will decline in the future, the bank noted.

With inflation set to fall back, there is a good chance that the Bank leaves rates on hold throughout two-year forecast horizon, Melanie Debono, an economist at Capital Economics, said.

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