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MNI NORGES WATCH: On Hold, Pushes Back Timing Of First Cut

(MNI) London
(MNI) London

Norges Bank left its policy rate on hold and pushed back the likely time of the first cut from September, with its guidance compatible with a Nov or Dec cut.

Norges Bank left its key policy rate unchanged at 4.5% and published guidance that pushed back against the September cut that it had previously signaled, suggesting instead that the first cut will not come until closer to the end of the year at the earliest which now aligns with market pricing.

Governor Ida Wolden Bache had previously said that the most likely timing of the first cut would be in September, but her comments and Norges Bank's policy statement made it clear that the key rate could well stay at 4.5% at least until the winter. Although headline inflation has fallen somewhat faster than expected, stronger wage growth and the weakness of the Norwegian krone were cited as upside inflation risks.

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Norges Bank left its key policy rate unchanged at 4.5% and published guidance that pushed back against the September cut that it had previously signaled, suggesting instead that the first cut will not come until closer to the end of the year at the earliest which now aligns with market pricing.

Governor Ida Wolden Bache had previously said that the most likely timing of the first cut would be in September, but her comments and Norges Bank's policy statement made it clear that the key rate could well stay at 4.5% at least until the winter. Although headline inflation has fallen somewhat faster than expected, stronger wage growth and the weakness of the Norwegian krone were cited as upside inflation risks.

Keep reading...Show less