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 upturn abroad and in Norway is continuing", with the

Governor stating rates will most likely be hiked after Summer 2018.

     The full text of the Norges Bank statement follows.

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     Key policy rate unchanged 0.50 percent

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

unchanged at 0.50 percent.

     On 2 March, the Government laid down a new Regulation on Monetary Policy.

The inflation target is now 2 percent, compared with the previous 2.5 percent.

The new regulation will not result in significant changes in the conduct of

monetary policy. The inflation targeting regime is flexible, and weight is given

to developments in output and employment. A lower numerical target in and of

itself is of little importance for the interest rate outlook in the coming

period.

     The upturn abroad and in Norway is continuing. Economic growth appears to

be somewhat stronger than expected, and the output gap for Norway is closing.

Underlying inflation is low, but rising capacity utilisation will probably push

up price and wage inflation further out.

     Monetary policy is expansionary. The outlook for the Norwegian economy

suggests that it will soon be appropriate to raise the key policy rate. The

uncertainty surrounding the effects of a higher interest rate suggests a

cautious approach. Overall, the changes in the outlook and the balance of risks

imply a somewhat earlier interest rate increase than in the December 2017

Monetary Policy Report.

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

risks suggests that the key policy rate will most likely be raised after summer

2018", says Governor Oystein Olsen.

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

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