RTTNews - Wednesday, Norway's central bank left its key interest rate unchanged at a record low level of 1.25%, pausing an easing cycle that started in October last year.

In its previous Executive Board meeting, which was in June, the Norges Bank made a 25 basis point cut to 1.25% from 1.50%.

The central bank Governor Svein Gjedrem said current developments in the Norwegian economy do not at present warrant a change in the interest rate.

He said inflation is approximately in line with the expectation and underlying inflation is close to the inflation target of 2.5%. Unemployment has been lower than projected and the financial market situation has improved. However, he noted that it is too early to determine whether the business cycle has turned.

Moreover, the governor said output and employment in Norway may slow somewhat less sharply than expected.

New figures may change the picture, but should these developments continue, it may be appropriate to increase the interest rate earlier than projected in the previous Monetary Policy Report, said Gjedrem.

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