Norges Bank keeps key rate at 4% as expected

(Sharecast News) - Norges Bank kept its key rate at 4% on Thursday, as widely expected, for the third meeting in a row. Norway's central bank said in a statement that if the economy evolves broadly as expected, the policy rate will be reduced further in the course of the year. However, the Bank indicated that it was in no rush to cut rates.

"In response to the inflation surge in 2022, we raised the policy rate sharply and rapidly, and in recent years the tightening of monetary policy has contributed to cooling down the Norwegian economy and to dampening inflation. Last year, we began a cautious normalisation of monetary policy and reduced the policy rate from 4.5% to 4%," it said.

"We are not in a hurry to reduce the policy rate further. The job of tackling inflation has not been fully completed, and if the policy rate is lowered too quickly, inflation could remain above target for too long. On the other hand, we do not want to restrain the economy more than needed."