The price increases in Norway are still above the inflation target and if the interest rate is lowered too early, prices may continue to rise rapidly, the bank writes in a press release.
"The interest rate has contributed to cooling down the Norwegian economy and to dampening the price increases", claims the central bank, which has had the steering rate at 4.50 per cent since December 2023.
According to the Norwegian Bank, the need remains to pursue a restrictive monetary policy to get inflation down to the target level within a reasonable time.
The Norwegian Bank also notes that the Norwegian krone and assesses the exchange rate as weaker than justified.
A Norwegian krone currently costs 93 Swedish öre on the currency market after a low point of 91 öre in early April – which was the weakest notation since the 1980s.
