Norges Bank's Executive Board decided to raise the sight deposit rate by 0.25 of a percentage point to 2.00 percent with effect from 1 July 2005. The overnight lending rate will also be increased by 0.25 of a percentage point the bank said in a statement.
The board said that recent economic developments had created arguments for a delay in rate hikes but that they concluded the right time was now.
The decision was made to bring the inflation rate back on target, but the Executive Board said that they envisioned a more moderate rate increase than they predicted in their March report.
