By Dominic Chopping
Norway's central bank left its key interest rate unchanged at 1.5% on Thursday, as expected, and reiterated its previous stance that the policy rate will likely remain at the present level in the coming period.
Norges Bank said the risk of a sharp downturn in the global economy appears to have receded somewhat since autumn, while new information indicates that the interest rate outlook hasn't changed much since its monetary policy report in December, with underlying inflation close to target.
However, the central bank said that the committee noted signs that growth in the Norwegian economy is slowing, with low GDP growth in November suggesting that the economy grew slightly less towards the end of 2019 than projected. In addition, the Norwegian Petroleum Directorate estimates that petroleum investment in 2020 may be somewhat lower than assumed in the December report.
It added that capacity utilization in the Norwegian economy appears to be somewhat above a normal level, but new information supports the view that the economy is probably near a cyclical peak.
"The Committee's current assessment of the outlook and the balance of risks suggests that the policy rate will most likely remain at the present level in the coming period," said Central Bank Governor Oystein Olsen.
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