means higher business costs, which will likely also contribute to sustaining inflation. figure 7. further rate rise most likely in may it is our responsibility to ensure that inflation falls to 2 percent. at the same time, we will avoid raising the policy rate beyond that needed to curb inflation. there is considerable uncertainty about future economic developments, but we will most likely raise the policy rate again in may, followed by a further rise to around 3. 5 percent in summer. this could mean an increase in the residential mortgage rate to between 4½ and 5 percent. chart 8 prospects for lower inflation and somewhat higher unemployment in our current projections, inflation falls back towards 2 percent over the next years. and if developments turn out as we expect, inflation will return to target with little rise in unemployment. we project some rise in unemployment, but from a very low level, and a slightly smaller rise than we anticipated in december. wage growth is expected to slow from next year, but lower inflation will probably result in firm growth in purchasing power in the years ahead. let me emphasise that the forecasts are precisely that – forecasts – and not a promise. if the krone proves weaker than projected, or pressures in the economy persist, a higher policy rate than currently projected may be needed to bring inflation down to target. if inflation falls faster or unemployment rises more than projected, the policy rate may be lower than projected. 3 / 3 bis - central bankers'speeches

ida wolden bache : higher policy rate to bring inflation down to target introductory statement by ms ida wolden bache, governor of norges bank ( central bank of norway ), at the press conference following norway's announcement of the policy rate, oslo, 23 march 2023. * * * accompanying charts to the speech chart 1 : policy rate raised from 2. 75 to 3 percent norges bank's monetary policy and financial stability committee has decided to raise the policy rate by 0. 25 percentage point to 3 percent. norges bank's task is to keep inflation low and stable. the operational target is inflation of close to 2 percent over time. we are also mandated to keep employment as high as possible and to promote economic stability. chart 2 : inflation markedly above target inflation has moderated a little recently but is still too high. in february this year, consumer prices were 6. 3 percent higher than one year earlier, which is markedly higher than the inflation target. prices for many goods and services have risen more than normal. in recent months, energy prices have shown a pronounced fall. as a result, inflation has been slightly lower than expected. we have raised the policy rate substantially over the past year, and the effects of the past rate hikes are not yet fully evident. growth in the norwegian economy is slowing, but activity is still high and the labour market is tight. at the same time, wage growth is on the rise, and the krone exchange rate has depreciated considerably. these developments will push up inflation and imply that the policy rate must be set higher than we envisaged earlier for inflation to return to target. price stability is essential for a well - functioning economy. high inflation is weakening household purchasing power, and lower - income households with the smallest margins are being hit hardest. borrowers are facing higher interest rates on top of high inflation, and many will be coping with tighter budgets. but by raising the policy rate, we are helping to bring down inflation, which is in everyone's interest. chart 3 turbulence in international banking markets in recent weeks, problems at certain us and swiss banks have led to large movements in global financial markets. equity markets have fallen, and risk premiums in money and bond markets have increased a little. expectations for both norwegian and international policy rates have declined markedly. 1 / 3 bis - central bankers'speeches we are not seeing any signs of liquidity problems for norwegian banks. norwegian banks are profitable,