Norway's central bank keeps benchmark rate unchanged at 0.50 pct

Norway's central bank said on Thursday it had decided to keep its key policy rate unchanged at a record low of 0.50 percent because developments of the Norwegian economy were in line with expectations.

Economic developments since March on the whole did not deviate substantially from the projections in the March 2016 monetary policy report, the bank said in a statement.

Consumer price inflation remains elevated, but a stronger krone may contribute to a slightly faster decrease in inflation than projected in March, the statement said.

On the other hand, the rise in oil prices may reduce uncertainty and contribute to somewhat higher growth in the Norwegian economy, it added.

"An overall assessment of new information indicates that the key policy rate should be kept unchanged at this (board) meeting," Oystein Olsen, governor of Norges Bank, was quoted as saying.

On March 17, the central bank said it had decided to lower the key policy rate by 0.25 percentage point to a record low of 0.50 percent because of weakened growth prospects for the Norwegian and global economy.

The bank also warned at the time that should the country's economy be exposed to new major shocks, the bank's executive board would not exclude the possibility of the key policy rate turning negative.

In Norway, the key policy 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