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25bps Hike Puts NOK Higher by as much as 2.5%

NORGES BANK

Norges Bank hikes rates, against expectations, by 25bps to 4.50%, and signals this will likely mark the peak of the rate cycle.

Policy statement here: https://www.norges-bank.no/en/news-events/news-pub...

Statement highlights:

  • The forecast indicates that the policy rate will lie around 4.5 percent until autumn 2024 before gradually moving down.
  • The policy rate is likely close to the level required to return inflation to target within a reasonable time horizon.
  • The Committee is concerned with balancing the risk of tightening too much against the risk of tightening too little.
  • Krone depreciation makes it more challenging to bring down inflation
Sharp NOK strength on the rate hike - EUR/NOK trading lower by as much as 2.5%, before bouncing modestly off new daily lows at 11.3768.

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