Norway's central bank keeps key rate unchanged at 0.75 pct

Norway's central bank said on Thursday it had decided to keep the key policy rate unchanged at 0.75 percent as the effects of the fall in oil prices and decline in oil investment were gradually becoming evident.

Unemployment had edged up as expected while household goods consumption had been lower than projected, Norges Bank said in a statement.

Overall, policy rate expectations among Norway's trading partners had fallen somewhat, the bank said, adding that the krone exchange rate had been weaker than projected and a more expansionary fiscal policy would contribute to fuelling demand for goods and services.

Inflation was in line with projections in the September 2015 Monetary Policy Report and the year-on-year rise in the consumer price index adjusted for tax changes and excluding energy products (CPI-ATE) was 3.1 percent in September, the bank said.

"An overall assessment of new information implies that the key policy rate be kept unchanged," said Oystein Olsen, the bank's governor, at the meeting of Norges Bank's executive board.

On Sept. 24, Norway's central bank decided to lower the key policy rate by 0.25 percentage points to a record low 0.75 percent because growth in the Norwegian economy was likely to remain low for a longer period than projected earlier, owing to the fall in oil prices through summer.

In Norway, the key policy rate, also called the sight deposit rate, is the interest rate on banks' deposits up to a quota in Norges Bank. Changes in Norges Bank's key policy rate will normally have a strong impact on short-term money market rates and on banks' deposit and lending rates. Endit