Norges Bank has submitted its assessment of the Ministry of Finance’s proposed new monetary policy provision, concluding that it will not change the conduct of monetary policy. The proposal retains low and stable inflation as the overriding objective, defined as consumer price inflation close to 2% over time. Monetary policy must also contribute to high and stable output and employment and counter the buildup of financial imbalances. The proposal removes two provisions that Norges Bank considers add no substantive requirements beyond the Central Bank Act’s rules on instrument independence and reporting. The bank interprets “close to” the target “over time” as allowing it to balance the speed of returning inflation to target against output and employment. High employment means the highest level sustainable over time, while financial regulation and supervision, rather than monetary policy, remain the primary tools for addressing financial imbalances.
2026-09-18Norges Bank
Norges Bank assesses streamlined monetary policy provision will not change policy implementation
Norges Bank concludes that the proposed streamlined monetary policy provision will not change how it conducts policy. It retains a 2% inflation target over time alongside considerations of sustainable output, employment and financial imbalances. The removed provisions largely duplicate existing statutory requirements on independence and reporting.