MNI: Norges Bank Leaves Policy Rate Unchanged: Text

     LONDON (MNI) - Policy rate unchanged at zero percent Norges Bank's Monetary

Policy and Financial Stability Committee has unanimously decided to keep the

policy rate unchanged at zero percent.

     "The Committee's current assessment of the outlook and balance of risks

suggests that the policy rate will most likely remain at today's level for some

time ahead", says Governor Oystein Olsen.

     The Covid-19 pandemic has led to a sharp downturn in the Norwegian economy.

Since the monetary policy meeting in May, activity has picked up faster than

expected. Unemployment has fallen more than anticipated and oil prices have

risen. Activity is nevertheless substantially lower than at the start of the

year, and there is considerable uncertainty surrounding the path to recovery.

     Low interest rates are contributing to speeding up the return to more

normal output and employment levels. This reduces the risk of unemployment

becoming entrenched at a high level and of inflation becoming too low further

out. On the other hand, a long period of low interest rates could increase the

risk of a build-up of financial imbalances. In the Committee's assessment, the

outlook and balance of risks imply a very expansionary monetary policy stance.

     The policy rate forecast implies a rate at the current level over the next

couple of years, followed by a gradual rise as economic conditions normalise.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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