May 19, 2020 / 8:42 AM / 11 days ago

UPDATE 1-Norway well placed to handle economic fallout from pandemic -c.bank chief

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OSLO, May 19 (Reuters) - The Norwegian economy is well positioned to weather the sharp downturn caused by the novel coronavirus outbreak, central bank Governor Oeystein Olsen told a hearing in parliament on Tuesday.

Norges Bank has cut its key policy interest rate three times in the last two months to a record-low zero percent to alleviate the impact, while the government plans record fiscal spending.

“We believe that all this, in combination with the actions taken by the health authorities and other bodies to continue to deal with the virus itself in a sensible and confidence-inspiring manner, will support a faster rebound in activity,” Olsen said.

Olsen reiterated that the central bank’s monetary policy committee is unlikely to move to a negative interest rate.

“The Committee stated at the monetary policy meeting in May that it is now of particular importance to ensure well-functioning financial markets. The Committee does not envisage making further policy rate cuts,” he said.

Norway’s crown currency, which traded at a two-month high of 10.93 against the euro ahead of Olsen’s speech, was little changed following the 0815 GMT publication. (Reporting by Terje Solsvik, editing by Gwladys Fouche)

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