Norges Bank lowers its deposit and lending rates

Norges Bank, the Central Bank of Norway, has reduced the interest rate on commercial and savings banks' sight deposits with Norges Bank, the deposit rate, and the interest rate on central bank overnight loans to banks by 0.5 percentage point. With effect from 3 March 1999, the deposit and overnight lending rate are 7.00 and 9.00 per cent respectively.

The decision to lower interest rates has been taken in response to developments in money and foreign exchange markets and the prospect of reduced pressures in the economy. Slower growth will gradually bring down price and cost inflation which, in conjunction with developments in money and foreign exchange markets, indicates that a reduction in interest rates is now appropriate. The interest rate differential against euro countries remains substantial even following the change in interest rates. Monetary policy is oriented with a view towards returning the exchange rate over time to its initial range as defined in the Exchange Rate Regulation.