Financial News: Norway Central Bank Keeps Key Rate Unchanged

Norway Central Bank Keeps Key Rate Unchanged

08/15/2024 - 08:19:00 (RTTNews)

(RTTNews) - Norway's central bank maintained its key interest rate and reiterated that the rate will be kept at the current level for some time to bring inflation down to the target.

The Monetary Policy and Financial Stability Committee of Norges Bank, headed by Governor Ida Bache, decided to keep the policy rate at 4.50 percent.

The previous change in the rate was a 0.25 percent hike in December.

"Based on our current assessment of the outlook, the policy rate will likely be kept at the current level for some time ahead," Governor Bache said.

The committee noted that if the policy rate is lowered prematurely, inflation could remain above target for too long. On the other hand, an overly tight monetary policy could restrain the economy more than needed, the governor said.

While inflation has continued to fall faster than policymakers expected, the renewed weakness of the krone has prevented them from taking a more dovish turn, Capital Economics' economist Jack Allen-Reynolds said.

The economist said Norges Bank is most likely to cut interest rates in December.

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