OSLO Oct 11 The effects of changes to monetary
policy are less predictable when interest rates drop towards
zero, Norway's central bank governor said in a speech on
"The policy rate in Norway has come down to a low level,
approaching a lower bound. This has increased the uncertainty
about the effect of monetary policy," Governor Oeystein Olsen
"Over the past year, Norges Bank has therefore reacted
somewhat less to new information, whether the information has
pulled in the direction of a lower or a higher policy rate, than
it would have done in a more normal situation. It has been
appropriate to proceed with caution," he added.
The central bank last cut its key policy rate in March, to
an all-time low of 0.5 percent, and has said it will most likely
stay at this level for the next few years.
(Reporting by Ole Petter Skonnord, editing by Terje Solsvik)