Norway central bank holds rates at zero, hike still 2 years away

Norway's central bank kept its key policy interest rate on hold at a record low zero percent on Thursday, as expected, and said any hike was still likely to be around two years away. and implies a rate at the current level over the next couple of years, followed by a gradual rise as activity approaches a more normal level," Norges Bank added.

Norway's central bank kept its key policy interest rate on hold at a record low zero percent on Thursday, as expected, and said any hike was still likely to be around two years away. Norges Bank has slashed rates three times since March, cutting the cost of borrowing from 1.5% to cushion the economy from the effects of the COVID-19 pandemic.

Economists polled by Reuters had unanimously predicted rates would remain on hold on Thursday. "The sharp economic downturn and considerable uncertainty surrounding the outlook suggest keeping the policy rate on hold until there are clear signs that economic conditions are normalising," Governor Oeystein Olsen said in a statement.

"The policy rate forecast is little changed since June ... and implies a rate at the current level over the next couple of years, followed by a gradual rise as activity approaches a more normal level," Norges Bank added. Norway's crown currency weakened to 11.14 against the euro at 0809 GMT from 11.08 just before the 0800 GMT announcement. (Editing by Gwladys Fouche)

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