Norges Bank Seen Keeping Rates Unchanged to Avoid Krone Gains

May 7 (Bloomberg) -- Norway’s central bank will probably keep interest rates unchanged this week to avoid spurring a rally in the currency, according to analysts surveyed by Bloomberg.

* The bank will leave its overnight deposit rate at 1.5%,

according to all 18 economists surveyed, in a decision due

to be announced at 10 a.m. tomorrow in Oslo * Norges Bank Governor Oeystein Olsen managed last year to

halt a rally in the currency that had hurt exporters and

kept inflation below target after warning he may cut rates;

the krone has weakened about 8% vs the euro during the past

12 months, pushing underlying annual inflation to 2.6% this

yr, above the bank’s 2.5% target * “One reason for them to sit still is that they don’t want

to be accused of talking up the currency,” said Harald

Magnus Andreassen, chief economist at Swedbank AB; “The

bank will recognize that retail sales came in positive and

that the housing market has stabilized, but we don’t expect

to” see any further signals from policy makers, he said

For Related News and Information: Norges Bank Keeps Its Key Rate Unchanged as Expansion Slows (3) NSN N33FNC6KLVRP <GO> Norway’s Krone Climbs Most in Four Weeks as Retail Sales Rise NSN N4UH4N6JIJUZ <GO>

To contact the reporter on this story: Saleha Mohsin in Oslo at +47-22-00-8214 or To contact the editors responsible for this story: Jonas Bergman at +47-22-00-8213 or Tasneem Hanfi Brogger

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