Norway's central bank cut its key interest rate on Thursday by 25 basis points to a new record low of 1.75 percent to spur sluggish inflation in the oil-dependent economy. This was the tenth time the bank has cut the deposit rate since it stood at 7.0 percent in December 2002.
The cut took Norges Bank's deposit rate below euro-zone rates for the first time.
The Norwegian crown rose against the euro and the dollar on Thursday after Norway's central bank cut rates by 25 basis points, in a relief rally following last-minute speculation of a 50 basis point cut.
"There had been some increasing speculation that they may actually go 50. The speculation had shifted (towards 50) over the past week or so. Twenty-five was fully expected," said Ian Stannard, currency strategist at BNP Paribas in London.
The Norwegian crown rose as far as 8.5850 per euro, just short of recent six-week highs, from 8.6640 before the rate decision.
