2024.03.2113:36:00UTC+00Norges Bank Keeps Policy Rate Steady At 4.5%

The Norwegian central bank maintained its key interest rate at its March meeting on Thursday, as the current stance is needed for some time ahead in order to bring inflation back to the target within a reasonable time horizon.

The Monetary Policy and Financial Stability Committee, headed by Governor Ida Bache, decided to keep the policy rate at 4.50 percent, Norges Bank said in a statement on Thursday.

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

"The policy rate will likely need to be maintained at the current level for some time ahead in order to bring inflation back to the 2 percent target within a reasonable time horizon," Governor Ida Bache said in a statement.

If there is a more pronounced slowdown in the Norwegian economy or inflation declines more rapidly, the policy rate may be lowered earlier than currently envisaged, the bank said.

The current forecast indicates that the policy rate will continue to lie at 4.5 percent in the period to autumn before gradually moving down.

Recent official data showed that Norway's consumer price inflation eased to a four-month low of 4.5 percent in February from 4.7 percent in January.

However, this was still well above target, and inflation is expected to be elevated ahead amid challenges of wage growth and the krone depreciation.

The bank expects economic growth to remain low through the first half of 2024 before picking up. Inflation is projected to slow somewhat faster this year than earlier and to approach 2 percent towards the end of 2027.