Norway cuts key policy rate by 0.5% points

STOCKHOLM, May 6 (Xinhua) -- Norway's central bank Norges Bank decided on Wednesday to reduce its key policy rate by another 0.50percentage points to 1.50 percent, said reports reaching here from Oslo.

"New information has confirmed that the current global economic downturn is the deepest in the post-war period. In order to mitigate the impact on the Norwegian economy, it is appropriate to reduce the key policy rate further," Governor of Norges Bank Svein Gjedrem said in a statement.

It is the bank's sixth consecutive rate cut since October last year. In March this year Norges Bank also cut rates by 0.5 percent.

Since then "production in Norway continues to decline, unemployment is rising and inflation is slowing," said Gjedrem.

"We are setting the key policy rate at a low level in order to curb the decline in activity and prevent inflation from falling too far," he added.

The new cut takes effect Thursday, according to Norges Bank.