Norway ups key policy rate, cites normalised economy

Norway's central bank on Thursday raised its key policy interest rate by a quarter of a percentage point to 0.25%, citing normalisation of the economy that suggests "there is no longer a need to maintain the current degree of monetary accommodation." The rate has been at 0% since May 7, 2020.

"A normalising economy now suggests that it is appropriate to begin a gradual normalisation of the policy rate," said Governor Oeystein Olsen.

The Norges Bank said that "the reopening of society has led to a marked upswing in the Norwegian economy, and activity is now higher than its pre-pandemic level." Although infection rates have risen after summer, "a high vaccination rate has reduced the need for COVID-related restrictions.'' Oil-rich Norway is not part of the European Union, though it has a close economic relationship with the bloc. The change is effective as of Friday.