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

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