MNI NORGES WATCH: Holds Again, Sees First Cut in March
MNI (STOCKHOLM) - Norges Bank left its policy rate on hold at 4.5% at its December meeting, the same level at which it has been throughout 2024, but signalled the next cut could come soon.
The Norwegian central bank's policy committee said that on the current outlook the policy rate "will most likely be lowered in March next year" with its forecasts showing gradual easing ahead.
The policy rate was shown being cut to 4.1% next year and down to 3.0% in 2027. The detailed rate projections showed a small upward revision by the end of the period compared to the previous forecasts with an average policy rate of 4.46% in Q1 next year, compatible with the 25-basis-point cut in March to which the committee is steering.
Inflation on the target core measure, CPI-ATE, was shown holding above the 2.0% target throughout the forecast, only falling from 2.7% in 2025 to 2.4%, underscoring the case for gradualism in rate cutting.
The committee noted that price inflation had slowed more quickly than it had previously expected.
It highlighted, however, deep uncertainty over the broader economic outlook with the threat of trade tariffs and doubts over global growth.