MNI BRIEF: Norges Bank Holds, Sees Cuts Starting Q1 2025
MNI (LONDON) - Norges Bank left its policy rate on hold at 4.5%, as widely expected, and said the first cut this cycle was likely to come in the first quarter of 2025.
Analysts have been split over whether the Norwegian central bank will begin easing in late 2024 or early 2025 but its own projections show a tilt to the latter, with Governor Ida Wolden Bache stating policymakers "will probably keep the interest rate at 4.5% for the rest of the year," but adding "the time to lower the interest rate is approaching." (see MNI NORGES WATCH: Soft Krone Complicates 2024 Cut Signalling )
The forecast showed gradual easing from Q1 2025 with the policy rate at 4.1% in 2025 and then falling to 3.3% in 2026 and to 2.8% by the end of the three year projection, with the pace of easing a little faster than in the previous quarterly forecast round. Inflation was shown staying above target at 3.0% in 2025 on the core target measure, CPI-ATE, and 2.8% in 2026.