Norway's Central Bank Holds Steady Amid Predictions of Rate Cuts

Norway's central bank maintained its policy interest rate at a 16-year high of 4.50%. The bank signaled plans to start cutting borrowing costs in the first quarter of 2025. Economists were divided on timing, with predictions varying from December this year to March 2025. The Norwegian crown saw a slight increase against the euro following the announcement.

Norway's central bank has decided to keep its policy interest rate unchanged at a 16-year high of 4.50%, a move that was largely anticipated by the market. The bank conveyed its intention to commence reducing borrowing costs in the first quarter of 2025.

The timing of potential rate cuts has been a topic of debate among economists. A Reuters poll revealed that while a majority foresee a rate reduction in December of this year, some expect the cuts to be delayed until March 2025. Norges Bank indicated in its latest report that the policy rate would maintain its current level until the end of 2024, with gradual reductions beginning early in the following year.

Following the announcement, the Norwegian crown appreciated slightly, strengthening to 11.66 per euro from 11.78.

(With inputs from agencies.)