Norway’s central bank kept its benchmark interest rate at 4.25% on Thursday, maintaining guidance for further reductions later this year as inflation pressures ease. The decision matched expectations from all 26 analysts in an Aug. 8–11 poll.
Governor Ida Wolden Bache said the bank remains on track to lower borrowing costs if the economy evolves as projected, but stressed no decision has been made for September’s meeting. “That will depend on the data coming in,” she noted, citing uncertainty over the global trade regime and the impact of U.S. tariffs.
Norges Bank surprised markets in June with a 25-basis-point cut — its first in over five years — and projected one or two more reductions in the second half of 2025. Economists widely expect the next cut in September to 4%, with another likely in December, bringing rates to 3.75% by year-end.
The Norwegian crown initially rose against the euro after the announcement before giving up gains to trade at 11.90. While inflation is not yet fully under control, the bank has signaled it wants to avoid unnecessarily tightening the economy, diverging from its previously more hawkish stance compared with other Western central banks.
Governor Ida Wolden Bache said the bank remains on track to lower borrowing costs if the economy evolves as projected, but stressed no decision has been made for September’s meeting. “That will depend on the data coming in,” she noted, citing uncertainty over the global trade regime and the impact of U.S. tariffs.
Norges Bank surprised markets in June with a 25-basis-point cut — its first in over five years — and projected one or two more reductions in the second half of 2025. Economists widely expect the next cut in September to 4%, with another likely in December, bringing rates to 3.75% by year-end.
The Norwegian crown initially rose against the euro after the announcement before giving up gains to trade at 11.90. While inflation is not yet fully under control, the bank has signaled it wants to avoid unnecessarily tightening the economy, diverging from its previously more hawkish stance compared with other Western central banks.
