Norwegian Central Bank Raises Interest Rate to Tackle Inflation
Ida Wolden Bache, governor of Norges Bank, announced the decision in a press conference.
She said the central bank's primary task is to maintain low and stable inflation, with an operational target of close to two percent over time. Additionally, it is mandated to support high employment levels and promote economic stability.
"In July, consumer prices were 5.4 percent higher than one year earlier. Excluding energy prices, inflation is now running at around 6.5 percent, which is markedly above our target," said Bache.
High and variable inflation has significantly impacted individuals, businesses, and society as a whole. "It makes planning more challenging and affects price perceptions, eroding the purchasing power of households, particularly low-income families who are more affected by sudden price increases," she said.
She said the future policy rate path will depend on economic developments. If the economy evolves as currently anticipated, the policy rate will be raised further in September.
"If the (Norwegian) krone proves to be weaker than previously projected or pressures in the economy persist, a higher policy rate may be needed to bring down inflation," Bache said.
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