Norway holds key rate unchanged at 4.5%

Norway’s central bank, Norges Bank decided on Thursday to maintain the key policy rate at 4.5 per cent during its 18 December meeting, citing a need to stabilise inflation around the target, according to the bank’s statement.

Governor Ida Wolden Bache indicated that a rate cut is likely in March 2025, as inflationary pressures have eased and economic activity remains resilient.

The Norwegian economy has responded to prior rate hikes, with inflation falling from its peak and unemployment slightly rising from historically low levels.

However, the Committee highlighted uncertainties, including global trade barriers and domestic price dynamics, which could alter the pace of future rate adjustments. Inflation is projected to stabilise above 2 per cent by late 2027, with gradual rate reductions expected to begin in early 2025.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser