Posted By Global Banking and Finance Review
Posted on January 23, 2025
OSLO (Reuters) -Norway's central bank held its policy interest rate unchanged at a 17-year high of 4.50% on Thursday, as unanimously expected by analysts in a Reuters poll, and maintained plans to start cutting borrowing costs in March.
Economists expect Norway's monetary policy to start catching up this year with that of other Western central banks, most of which began cutting rates in 2024 as growth slowed and inflation waned.
"The policy rate will likely be reduced in March," Norges Bank Governor Ida Wolden Bache said in a statement.
It would be Norges Bank's first interest rate cut since May 2020.
The central bank last month said it planned to cut rates three times in 2025 to 3.75% by year-end. It is due to release a revised forecast in March.
In their discussions, Norwegian central bankers expressed concern about the risk of an increase in international trade barriers.
"Higher tariffs will likely dampen global growth, but the implications for price prospects in Norway are uncertain," the bank said in the statement.
The Norwegian crown traded largely unchanged at 11.74 against the euro at 0906 GMT.
All but one of the 25 analysts in the Reuters Jan. 13-20 poll predicted that a quarter-percentage point rate cut to 4.25% will be announced in March, while a single participant anticipated a 0.50-point cut to 4.00%.
(Reporting by Gwladys Fouche, editing by Terje Solsvik)
