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Norway hikes interest rates, maintains plan for further increase

Key Points
  • The bank raised its key policy rate to 1.25% from 1.0% previously, in line with the forecast of most economists in a Reuters poll. 
  • The board's aim of tightening policy stands in contrast to the U.S. Federal Reserve and the European Central Bank.

Norway's central bank raised its main interest rate on Thursday, as expected, and maintained plans to hike again in the second half of the year and also in 2020 as domestic strength trumps a global economic slowdown.

Pedestrians pass the entrance to Norway's central bank, also known as Norges Bank, in Oslo, Norway, on Thursday, Feb. 13, 2014.
Kristian Helgesen/Bloomberg | Bloomberg | Getty Images

The bank raised its key policy rate to 1.25% from 1.0% previously, in line with the forecast of 27 out of 29 economists in a Reuters poll. 

"Our current assessment of the outlook and balance of risks suggests that the policy rate will most likely be increased further in the course of 2019," Governor Oeystein Olsen said in a statement.

The board's aim of tightening policy stands in contrast to the U.S. Federal Reserve and the European Central Bank, both of which have signalled in recent days that they are contemplating monetary easing. 

Following the unanimous decision, Norway's crowns currency rose 1% against the euro to trade at 9.6780 at 0802 GMT.