The Norwegian Krona lost ground against the euro in European deals on Thursday, after Norway's central bank lowered its key policy rate unexpectedly by a quarter point and indicated further reduction in the coming year.

The Executive Board of Norges Bank decided to cut its key rate to 0.75 percent from 1.00 percent.

Governor Øystein Olsen said the current outlook for the economy suggests that the key policy rate may be reduced further in the coming year.

"Growth prospects for the Norwegian economy have weakened, and inflation is projected to abate further out," he said.

The Norwegian Krona depreciated to more than a 4-week low of 9.5054 against the euro, compared to Wednesday's closing value of 9.2629. The Krona is likely to find support around the 9.6 mark.

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