Norway raises key interest rate to 4.50%

Norway's central bank raised its benchmark interest rate by a quarter point to 4.50 percent on Thursday, saying the move was needed to help curb inflation.

Norges Bank governor Ida Wolden Bache said inflation had been above target for several years. She said the policy rate would probably need to stay elevated for a time and that the bank's monetary policy committee was prepared to raise it further if needed to bring inflation down to the 2 percent target.

The krone strengthened after the announcement, as higher interest rates can make Norwegian bonds and other assets more attractive to international investors.

Underlying inflation, the bank's preferred indicator, stood at 3 percent in August, above the 2 percent target. Norges Bank had already raised the key rate by a quarter point in May.