Norway's central bank on Thursday kept its policy interest rate unchanged at 1.5 percent, citing muted inflation and slower than-expected economic growth. The decision was in line with economists' expectations.
The central bank said it is likely to take a long time for inflation to move up to its target. Norway's consumer price inflation slowed to 1 percent in February from 1.3 percent in January. Core inflation eased to 1.1 percent.
Capacity utilization in the economy is somewhat above a normal level and unemployment is low. At the same time, household debt and house prices are still rising faster than income, the bank said.
"The analyses suggest that the key policy rate be kept low longer than previously anticipated. The first increase in the key policy rate is now projected to take place in spring 2014," Governor Øystein Olsen said.
The bank has decided to keep the main interest rate in the 1-2 percent range until the next meeting in June, unless the Norwegian economy is exposed to new major shocks.
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