Norwegian Central Bank Holds Interest Rates Steady at Highest Level in 17 Years
As inflation rises unexpectedly, the central bank maintains its key rate at 4.5%, reflecting global economic uncertainty.
The Norwegian central bank decided to hold interest rates steady during a meeting on Thursday, in light of an unexpected acceleration in inflation and current economic uncertainty.
The central bank has set its key interest rate at 4.5%, the highest level in 17 years.
According to the monetary policy statement, the economic environment is characterized by uncertainty; however, the current projections from the Financial Stability Committee suggest a potential continuation of borrowing cost reductions later this year.
In a prior meeting in January, which also resulted in a decision to maintain interest rates, the bank had indicated plans to lower borrowing costs in March by 25 basis points.
Earlier projections had anticipated three interest rate cuts in 2025. Nonetheless, in the latest statement, the central bank noted that inflation has risen more than expected, indicating that an early reduction in interest rates could lead to a faster pace of price increases.
The central bank has set its key interest rate at 4.5%, the highest level in 17 years.
According to the monetary policy statement, the economic environment is characterized by uncertainty; however, the current projections from the Financial Stability Committee suggest a potential continuation of borrowing cost reductions later this year.
In a prior meeting in January, which also resulted in a decision to maintain interest rates, the bank had indicated plans to lower borrowing costs in March by 25 basis points.
Earlier projections had anticipated three interest rate cuts in 2025. Nonetheless, in the latest statement, the central bank noted that inflation has risen more than expected, indicating that an early reduction in interest rates could lead to a faster pace of price increases.
Translation:
Translated by AI
