Oslo - The Norwegian central bank on Wednesday cut its lead rate a further 1.75 percentage points to 3.00 per cent, which was in line with market expectations.

The new cut takes effect Thursday, the central bank said.

The decision to lower rates was taken against the backdrop of weaker growth in Norway and internationally since the end of October, Norges Bank Deputy Governor Jan F Qvigstad said in a statement.

Meanwhile, "inflation is subsiding faster than expected," he added.

The central bank said its assessment was that the Norwegian economy will grow "markedly lower than anticipated in October," adding it expected production and employment to fall in the coming quarters.

A drop in the valute of the Norwegian currency, the krone, has helped "mitigate the effects of the international downturn on the Norwegian economy," the central bank said.

At the end of October the bank lowered its rate by 50 basis points to 4.75 per cent.

Norway is not a member of the European Union. (dpa)