COPENHAGEN, Denmark (AP) — Norway’s central bank raised its key policy interest rate by a quarter-percentage point to 2.25% on Thursday, as other banks around the world also moved to curb inflation.
Norges Bank said inflation – which reached 6.5% in August – “has risen sharply in recent months and is much higher than forecast.”
“Inflation is significantly above our target of 2%, and it is likely that inflation will persist longer than previously estimated,” Governor Ida Olden Bach said in a statement.
The central bank added that “there are now clear signs of a cooling economy. Easing pressures on the economy will contribute to keeping inflation more under control.”
Norges Bank noted that “a faster rate hike now would reduce the risk of inflation entering higher levels and the need for further tightening of monetary policy.”
Policy rates are likely to be hiked further in November, it said.
It comes as central banks around the world are raising big rates to combat inflation, which has risen as the global economy rebounds from the COVID-19 pandemic and then suffered from Russia’s war in Ukraine.
On Wednesday, the US Federal Reserve It raised interest rates by three-quarters of a point for the third time in a row. In a busy day for central banks, Swiss monetary policymakers made the biggest-ever hike in key interest rates Thursday, while the Bank of England is under pressure to act aggressivelyvery
Earlier this month, the European Central Bank also raised its rates by three-quarters of a point. Norway is not part of the European Union.