Norway's central bank has dropped its key rate by a quarter of a percentage point to a record low of 0.50 percent and indicated that it could cut it further, even into negative territory.

Norges Bank says Thursday's move was sparked by falling global interest rates, predictions of lower than expected world growth and "somewhat weakened" growth prospects for the Norwegian economy.

Bank Governor Oystein Olsen says the outlook for the Scandinavian country's economy "suggests that the key policy rate may be reduced further in the course of the year," including that if it's "exposed to new major shocks" the bank wouldn't hesitate to cut the rate to negative.

The bank says unemployment will grow slightly and that a falling krone is pushing up consumer prices and inflation.