Norges Bank slashed 25 basis points from its overnight deposit rate, the amount banks earn by leaving their cash with the central bank, hoping to cushion the economy in the face of fast-slowing growth.
“It is a new era for the Norwegian economy. We are no longer in a league of our own,” Øystein Olsen, the bank's governor, said in a press conference following the announcement.
In its statement announcing the move, the bank said it now believed that Norway was about to go into a longer period of slow growth than it had previously believed.
“Growth in the Norwegian economy is likely to remain low for a longer period than projected earlier owing to the fall in oil prices through summer,” it said. “Oil investment is expected to fall to a further extent than projected [at our previous meeting] in June and lower demand for goods and services from the petroleum sector will reduce activity in other parts of the economy.”