Norwegian central bank raises key interest rate to 3.75 per cent

Business News

Jan 24, 2007, 13:50 GMT

Oslo - Norway's central bank announced Wednesday it would raise its key interest rate by one quarter point to 3.75 per cent, citing strong economic activity and wage increases. Norges Bank's executive board also cited that the 'risk of an imminent and pronounced slowdown in the world economy is now judged to be somewhat smaller than earlier.' The bank's most recent hike was last December when the deposit rate was raised by 0.25 percentage points. The new hike was due to take effect Thursday. The board said the rate was 'still lower than what we consider to be a neutral level' and it would continue to raise the interest rate in 'small, not too frequent steps.' The bank's inflation target remains at 2.5 per cent for the coming two-year period. In its outlook, the central bank said it expected inflation to pick up in the second half of 2007 due to factors including high capacity utilization and rising wages. © 2007 dpa - Deutsche Presse-Agentur

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Norwegian central bank raises key interest rate to 3.75 per cent

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