Norges Bank opted to maintain its benchmark interest rate steady on Thursday, signifying their intention to keep the policy rate unchanged until the year's end, though indications suggest an impending shift towards easing.
The Monetary Policy and Financial Stability Committee, chaired by Governor Ida Bache, resolved to hold the policy rate at 4.50 percent.
"The policy rate will likely be maintained at 4.5 percent until the end of the year," stated Bache.
She further remarked, "We recognize the necessity of sustaining the current policy rate for the foreseeable future, but the moment for easing monetary policy is nearing."
The current policy rate forecast anticipates that interest rates will begin a gradual decline starting in the first quarter of 2025. While largely in line with projections from the June report, this forecast suggests a slightly accelerated decrease in the policy rate throughout 2025.
Economic growth is projected to see a modest increase in the coming years, with inflation expected to approach the 2 percent mark by the end of 2027.
According to Capital Economics' economist Andrew Kenningham, policymakers are likely to start cutting rates marginally earlier than projected, with an initial reduction penciled in for December.
Kenningham further predicted that the bank would reduce rates more swiftly next year than their projections currently suggest, aligning more closely with investor expectations.
