Central Bankers’ love affairs with negative rates these days are no biggie, still it’s a news when despite some adverse reaction in the market to negative rates another one inches towards it.

Today, Norway’s central bank, lowered its repo rate by 25 basis points to 50 basis points (still in positive). That was well expected, what was not was the warning that the bank stands ready to cut interest rates below zero mark.

According to latest data, Norway’s economy contracted by 1.2% in last quarter of 2015. The weakness is largely associated with lower oil price, which is Norway’s biggest exporting commodity. Thanks to its dependence on oil and prominence, sovereign wealth fund of Norway is biggest in the world of around $830 billion.

Central Bank governor, Mr. Olsen warned that the bank stands ready to cut rates further and possibly into negative territory as growth prospect weakens and inflation likely to moderate further. However the bank may not consider moving towards zero without large external shock such as sharp drop in oil price further to new low or hard landing in China. Mr. Olsen warned as the bank approaches zero mark policymakers will be exercising greater caution while deciding on the rate.

“The experience of other countries suggests that the lower bound for the key policy rate is below zero, but it is difficult to provide a precise estimate of the limit. Lower interest rates could increase financial system vulnerabilities. As the key policy rate approaches a lower bound, the uncertainty surrounding the effects of monetary policy increases. This now suggests proceeding with greater caution in interest rate setting.”

Despite the rate Norwegian Krone is stronger by +0.5% against Dollar, trading at 8.415 per Dollar.