By Dominic Chopping
Norway’s central bank held its key policy rate at 4% on Thursday and reconfirmed plans to slowly ease monetary policy in the coming years.
The decision was in line with a Wall Street Journal poll.
Norges Bank has delivered two rate cuts in the current cycle but has previously signaled that it would take an extended pause to assess the impact, while also waiting for more economic data to determine its next move.
Still, it had suggested a very gradual pace of easing over the next few years.
Policymakers said Thursday that inflation is still too high with underlying inflation hovering around 3% for some time, while a weaker krone is contributing to raising inflation prospects, so a restrictive monetary policy is still needed.
“We will finish the job and ensure that inflation is brought all the way back to 2%,” Gov. Ida Wolden Bache said in a statement.
However, if the economy evolves broadly as expected, then the policy rate will be reduced further in the course of the coming year, Norges Bank said.
The central bank’s policy-rate forecast is consistent with one to two rate cuts next year and a further reduction to somewhat above 3% toward the end of 2028. Inflation is expected to move down and be close to 2% in 2028.
“We are not in a hurry to reduce the policy rate,” Bache said.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
12-18-25 0445ET