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OSLO, Oct 11 (Reuters) - 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 Tuesday.
"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 said.
"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)