The Norges Bank on Thursday become the first major Western central bank to raise interest rates following the onset of the coronavirus pandemic.

Norway’s central banks unanimously increased rates from zero to 0.25% after cutting rates three more times in 2020 because of the effects of the crisis.

In a Thursday statement, Governor Oystein Olsen stated that a normalizing economy suggests it was appropriate to start a gradual normalization of the policy rate.

According to the bank, another increase is possible in December.

Norway’s currency rallied to its highest levels since June against the euro, and gained 0.7% against the U.S. dollar.

In the face of strong inflation and solid growth, many central banks are considering similar rate increases. Federal Reserve officials from the United States reiterated Wednesday that they expect a reduction in bond buying “soon.” While the European Central Bank recently cut back on its bond purchases, a true rate hike is likely to still be some time away for both banks.

The reopening society in Norway has seen a significant upsurge in activity, with it now being higher than pre-pandemic levels. In a statement, the bank said that unemployment fell further, while capacity utilisation seems to be at a normal level.