Norway's interest rates are anticipated to remain stable until the end of the year, as the country's economic outlook remains ambiguous, according to a statement from Norges Bank. The central bank maintained its key interest rate at 4.5 percent for the seventh consecutive policy session, meeting economists' predictions.
The Monetary Policy and Financial Stability Committee of Norges Bank confirmed the decision to hold the policy rate steady at 4.5 percent. The last adjustment was a quarter-point increase implemented in December of the previous year.
Governor Ida Wolden Bache remarked, "The policy rate will most likely be maintained at 4.5 percent through the end of 2024."
The bank officials expressed that a tight monetary policy remains necessary to ensure inflation reaches its target within a reasonable period.
The monetary policy report from September suggested a gradual decrease in the policy rate starting in the first quarter of 2025.
Norges Bank noted that there has been no significant change in the economic outlook for Norway since the last monetary policy meeting. Policymakers also took into account that inflation has decelerated more quickly than anticipated over the past year and was lower in September than expected. However, the bank cautioned that the recent depreciation of the krone and the rapid increase in business costs may hinder further reduction in inflation.
Additionally, global expectations for policy rates have risen, and the krone has been slightly weaker than projected.
"There is uncertainty surrounding future developments in the Norwegian economy," Norges Bank indicated.
"The Committee will have more information on economic developments at its next monetary policy meeting in December when new forecasts will be released."
The upcoming rate-setting session is scheduled for December 19.
