Inflation
When prices rise, the value of our money is reduced. This is called inflation. In order to maintain a stable value of our money, Norges Bank has been tasked with keeping inflation low and stable over time.
Frequently asked questions.
What does it mean that Norges Bank pursues flexible inflation targeting?
The political authorities have decided that Norges Bank's task is to keep inflation low and stable. The operational target is inflation of close to 2 percent over time. Norges Bank is also mandated to keep employment as high as possible and to promote economic stability over time.
Flexible inflation targeting means that Norges Bank can deviate somewhat from the 2 percent inflation target for a period if this is sensible in light of the other objectives.
When Norges Bank sets the policy rate, it often needs to make trade-offs between the inflation target and the objective of keeping employment as high as possible.
When inflation is too high, Norges Bank is responsible for bringing it down to 2 percent. At the same time, the Bank will avoid raising the policy rate more than needed to tackle inflation.
