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December 14, 2011

Norway cuts interest rate to 1.75 percent



OSLO, Norway (AP) — Norway's central bank has slashed its key interest rate for the first time in more than two years to try to curb the effects of the European debt crisis on the Norwegian economy.

Norges Bank cut the rate by 0.50 percentage points to 1.75 percent Wednesday.

Deputy Governor Jan Qvigstad says "the turbulence in financial markets has intensified and external growth is now expected to be clearly weaker."

He adds that inflation is already low, but to be able to prevent it from sinking even lower "a reduction in the key policy rate is now appropriate."

Norway's last interest rate cut came in June, 2009.

Earlier this year, the oil–rich country also warned it was prepared to cut interest rates to prevent an overvaluation of its currency.



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