Falling oil price is taking its toll in Norway as the country central bank cuts interest rate again for the second times this year and the third time in 10 months. Oeystein Olsen, Norway's Central Bank governor announced the rate cut on Thursday citing that slow economic growth as the main reason.

Norges Bank reduced its main interest rate by 0.25 percent from 1 percent previously as reported by The Wall Street Journal. The move is unexpected as only 33 percent of economists surveyed by The New York Times are expecting another rate cut this year. An economist interviewed also said that there might be another interest cut before Christmas and early 2016.

Oeystein Olsen also noted that the bank is not planning to keep the interest rate at the same level since it is predicting that economic growth will remain low for a longer period. A currency strategist at SEB bank, Carl Hammer said that there is 60 percent probability that the interest rate could be lower than 0.5 percent.

Oil and gas sector is the fifth largest Nordic's economy contributor and the falling oil price is causing lots of companies had to reduce their workforce and cancelling their investment. The government is worried that the weakening in this sector will start to hit other sectors soon forcing higher unemployment in the future.

Currently, the unemployment rate in oil and gas sector increase to 4.3 percent after the massive layoff. The sector makes up 22 percent of Norwegian GDP with 67 percent of the products being exported overseas.

The currency market reacts wildly towards the news as its currency weakened against the euro from 9.2749 to 9.4158, a three percent fall. However, Fox News reported that the central bank said a weaker currency is better for the country as it will encourage exports.

Business in Eurozone countries started to slow down due to lower demand in Asia especially after China economic problem. Chief economist at Markit, Chris Williamson said that euro zone third-quarter GDP is expected to grow 0.4 percent.

The inflation rate in Norway has been more than bank's target of 2.5 percent however, it is predicted to go lower as the economic gets weaker. With the price of oil keeps on fluctuating, the matter could get worse for the country. Some economists argue that lowering the interest rate will not help the economy as the country's household debt keeps on increasing.