Article in Aftenposten on 29 May 2001
Inflation target - how interest rates are set
"The new mandate for monetary policy with an inflation target provides a sound basis for assessing Norges Bank's interest rate setting," Central Bank Governor Svein Gjedrem writes in a feature article in Aftenposten on 29 May. Norges Bank normally sets the key rate with a view to maintaining inflation at 2½ per cent two years ahead. It is equally important to avoid an inflation rate that is too low, as it is to avoid an inflation rate that is too high. As experience with setting interest rates using an inflation target is gained, the scope for placing emphasis on stability in the real economy will probably increase.
29 May 2001 09:09