Norway's central bank kept its policy rate steady at 1.5 percent, as expected, saying that country's inflation was low while economic growth among its trading partners was weak and their interest rates very low.
But Norges Bank maintained an upward bias in its policy guidance, quoting Deputy Governor Jan Qvigstad as saying that "developments in the Norwegian economy give reason to believe that inflation will gradually pick up. This suggests that the key policy rate can be raised further out."
At its last meeting in October, the central bank delayed an increase in its policy rate until 2013 due to low inflation and low interest rates worldwide. In its previous policy report from June, the central bank had forecast an increase in its policy rate by the end of 2012.
The central bank, which has cut rates twice this year, said there was still considerable uncertainty surrounding global economic developments though credit risk premiums have declined and euro area countries have agreed on actions that may improve the situation.
Since the bank's October policy report, economic developments have been in line with projections and the Norwegian economy was "growing at a solid pace," the bank said.
Norway's total Gross Domestic Product contracted by 0.8 percent in the third quarter from the second's 1.0 percent growth while GDP for mainland Norway expanded by 0.7 percent in the third quarter from the second.
Norway's inflation rate was steady at 1.1 percent in November from October. Norges Bank targets 2.5 percent annual inflation.