Mubasher: Norway’s central bank left its benchmark interest rate unchanged as expected, but said it would tighten cost of borrowing at a slightly slower pace than previously planned.

Norges Bank on Thursday decided unanimously to leave the interest rate unchanged at 0.75%.

The upturn in the economy seemed to be ongoing, whereas spare capacity has gradually faded, with capacity utilisation close to a normal level, the central bank said.

The underlying inflation is close to the inflationary target of 2%, the bank added.

Norges Bank aims to raise rates in next March, in line with projection from last September, when it hiked rates for the first time in seven years.

The bank plans five rate hikes by the end of 2021, of which two increases would be in next year, one in 2020, and two in 2021, Governor Oeystein Olsen told reporters.

“Our current assessment of the outlook and the balance of risks suggest that the policy rate will most likely be raised in March 2019,” Olsen added.

Norges Bank shed light on the impact of rising protectionism throughout this year and political uncertainty have weakened global growth prospects.

“Persistent trade conflicts and turbulence surrounding political processes in Europe may dampen growth among trading partners more than projected,” the bank said, citing the potential impact of a no-deal Brexit on financial markets.

By 11:34 am GMT, the Norwegian krone (NOK) rose 0.17% NOK 8.5494.