Norway's central bank raises key policy rate to 4 percent
The key interest rate has been raised to 4 percent, and another hike will likely follow in September, Norway's central bank announced Thursday.
Norway's interest rate is being raised to try and curb inflation and slow the economy. The latest hike is the 12th rate increase since 2021.
"The further course of the key rate will depend on the economic development. If things go as we now believe, we will raise the key interest rate further in September," Ida Wolden Bache, governor of the bank, said.
Norway's annual core inflation, which excludes energy costs, was 6.4 percent in July, down from a record 7 percent in June.
"It has turned out more or less as Norges Bank predicted - inflation has been a bit higher, which could have encouraged a slightly more aggressive rate increase, but then the krone has strengthened a bit," Nordea economist Kjetil Olsen told broadcaster TV 2.
Norway's krone strengthened following the rate hike. However, if the currency proves to be weaker than forecast or pressures on the economy persist, then the central bank could take the rate beyond 4,25 percent.
"If there is a more pronounced slowdown in the Norwegian economy or inflation declines more rapidly, the policy rate may be lower than envisaged," Norges Bank added.
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Norway's interest rate is being raised to try and curb inflation and slow the economy. The latest hike is the 12th rate increase since 2021.
"The further course of the key rate will depend on the economic development. If things go as we now believe, we will raise the key interest rate further in September," Ida Wolden Bache, governor of the bank, said.
Norway's annual core inflation, which excludes energy costs, was 6.4 percent in July, down from a record 7 percent in June.
"It has turned out more or less as Norges Bank predicted - inflation has been a bit higher, which could have encouraged a slightly more aggressive rate increase, but then the krone has strengthened a bit," Nordea economist Kjetil Olsen told broadcaster TV 2.
Norway's krone strengthened following the rate hike. However, if the currency proves to be weaker than forecast or pressures on the economy persist, then the central bank could take the rate beyond 4,25 percent.
"If there is a more pronounced slowdown in the Norwegian economy or inflation declines more rapidly, the policy rate may be lower than envisaged," Norges Bank added.
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