MNI: Norges Bank Leaves Rates Unchanged At 0.50% - Text

     LONDON (MNI) - The Norges Bank has kept its key policy rate unchanged at

0.50%, assessing "the outlook and the balance of risks for the Norwegian economy

do not appear to have changed substantially since the September Report."

     The full text of the Norges Bank statement follows.

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     Key policy rate unchanged at 0.50 percent

     Norges Bank's Executive Board has decided to keep the key policy rate

unchanged at 0.50 percent.

     There is a continued need for an expansionary monetary policy. Interest

rates abroad are low. There is still some spare capacity in the Norwegian

economy. The outlook suggests that inflation will remain below 2.5% in the

coming years.

     The upturn in the Norwegian economy is continuing, and the output gap

appears to be somewhat narrower than previously projected. Inflation is low, but

a weaker krone than expected in September may lead to a faster rise in inflation

than forecast earlier. As spare capacity is absorbed, wage growth is also likely

to edge up.

     On the whole, the changes in the outlook and the balance of risks imply a

somewhat earlier increase in the key policy rate than projected in the September

Report. Uncertainty surrounding the effects of monetary policy suggests a

cautious approach to interest rate setting, also when it becomes appropriate to

increase the key policy rate.

     "The Executive Board's current assessment of the outlook and balance of

risks suggests that the key policy rate will remain at today's level in the

period ahead," says Governor Oystein Olsen.

     The key policy rate in Monetary Policy Report 4/17 is forecast to remain at

0.5 percent in the period to autumn 2018, followed by a gradual increase.

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