Norway Central Bank Keeps Rate Unchanged As Expected
2024-09-12
3131
(fxcue news) - Norges Bank left its benchmark rate unchanged on Thursday and suggested that the policy rate will be kept at the current level until the end of this year although the time to ease is approaching.
The Monetary Policy and Financial Stability Committee, headed by Governor Ida Bache, decided to hold the policy rate at 4.50 percent.
"The policy rate will likely be kept at 4.5 percent to the end of the year," Bache said.
"We believe that there is a need to keep the policy rate at today's level for a period ahead but that the time to ease monetary policy is approaching," the governor added.
Today's policy rate forecast suggests that the interest rate will be gradually reduced from the first quarter of 2025. Although the forecast is little changed from the June report, it indicates a slightly faster fall in the policy rate through 2025.
Economic growth is expected to pick up slightly in the years ahead and inflation is projected to approach 2 percent towards the end of 2027.
Capital Economics' economist Andrew Kenningham said policymakers are likely to begin cutting rates a little sooner and he has pencilled in a first cut in December.
Further, the economist said the bank will cut rates somewhat faster than suggested by its projections next year, at a pace close to that which investors anticipate.
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