Norway's Central Bank Holds Rate Steady at 16-Year High

Norway's central bank held its policy interest rate unchanged at 4.50%, a 16-year high, with any cuts delayed until the first quarter of 2025. This decision aimed to stabilize inflation and boost the crown currency. Economists were divided over the timing of future rate cuts.

Norway's central bank held its policy interest rate unchanged at a 16-year high of 4.50% on Thursday, as widely expected, and said any cuts must wait until the first quarter of next year, bolstering the crown currency.

Economists have been divided over when Norges Bank might begin to ease policy, with a majority of those polled by Reuters predicting a cut in December this year, while a minority pointed to March of 2025 as the most likely timing.

The Norwegian crown strengthened to 11.67 against the euro at 0855 GMT, from 11.78 just before the announcement. Norges Bank's decision contrasts with recent decisions by other central banks like the U.S. Federal Reserve and the European Central Bank, which have embarked on policy easing.

Economists noted Norway's central bank is trying to balance above-target inflation with a cooling economy. The firm stance on rates was likely intended to shore up the weak crown, according to economists including Oeystein Doerum and Elisabeth Holvik.

(With inputs from agencies.)