Norges Bank keeps rates at 4.5%, sees cut in March
By Michele Maatouk
Date: Thursday 23 Jan 2025
(Sharecast News) - Norway's central bank kept interest rates unchanged on Thursday at a 17-year high of 4.5%, as it said rates will likely be cut in March.
Norges Bank said in a statement: "Since the December 2024 Monetary Policy Report, underlying consumer price inflation and unemployment have been broadly as projected. Overall consumer price inflation has been lower than expected.
"On the other hand, fewer policy rate cuts abroad are now expected than earlier. The Committee's assessment is that a restrictive monetary policy is still needed to stabilise inflation around target, but that the time to begin easing monetary policy is soon approaching."
The Bank did not publish any new forecasts, but in its projections in December, Norges said the policy rate was set to fall to an average of 3.8% in the fourth quarter of this year, 3.2% in the fourth quarter of next year and 2.9% in Q4 2027.
"That would be a very slow loosening cycle," said Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics.
"But we can't take this as gospel because central bank's forecasts for their own policy rates have historically not been very reliable more than a few months into the future.
"We think the path of inflation will allow the Bank to move a bit more quickly, cutting by 25bp once per quarter until the policy rate reaches 3% in the middle of 2026."
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