Norway keeps rates on hold, may extend tight policy

There was no new forecast released on Friday. The next policy prediction is due on June 20. A weakness of the Norwegian currency, coupled with signs of renewed inflation abroad, had led some analysts in recent weeks to predict that Norges Bank may eventually postpone its planned cut.

Norway's central bank kept its key policy interest rate on hold at 4.50% on Friday, as unanimously expected by analysts, and said a tight monetary policy stance may be needed for somewhat longer than planned in order to curb inflation.

"The data so far could suggest that a tight monetary policy stance may be needed for somewhat longer than previously envisaged," Norges Bank said in a statement. The Norwegian crown strengthened to 11.75 against the euro at 0807 GMT, from 11.77 just before the announcement.

The monetary policy committee in March forecast one rate cut this year from the current 16-year high of 4.50%, and said this would most likely come in September. There was no new forecast released on Friday. The next policy prediction is due on June 20.

A weakness of the Norwegian currency, coupled with signs of renewed inflation abroad, had led some analysts in recent weeks to predict that Norges Bank may eventually postpone its planned cut.

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