Norway Central Bank Holds Key Rate As Expected

(RTTNews) - Norway's central bank maintained its interest rate as widely expected on Thursday but signaled further reduction this year.

The Monetary Policy and Financial Stability Committee of Norges Bank decided to hold the policy rate at 4.25 percent. The bank had reduced the rate by 25 basis points in June, which was the first cut in five years.

Governor Ida Wolden Bache said the job of tackling inflation has not been fully completed and a restrictive monetary policy is still needed.

"At the same time, we do not want to restrain the economy more than needed," the governor said.

"In June, we began a prudent easing of monetary policy, and it will likely be appropriate to continue with a cautious normalisation of the policy rate ahead," he added.

The committee observed that the overall outlook for the Norwegian economy was broadly unchanged from the outlook presented in June.

Policymakers noted that uncertainty surrounding the outlook was greater than normal, and the future path of the policy rate will depend on economic developments.