By Dominic Chopping
Norway's central bank held its key policy rate at 4.5% and reiterated guidance that the rate is likely to stay at that level for some time as high wage growth and last year's krone depreciation prevent a quick fall in inflation.
The decision was in line with a Dow Jones poll.
Inflation is slowing and is expected to slow somewhat faster this year than previously expected, but isn't expected to approach the 2% target until the end of 2027, the bank said Thursday.
Norges Bank said it was concerned that if the policy rate is lowered prematurely, inflation could remain high because the krone might weaken, while overly tight monetary policy could restrain the economy more than needed.
"The committee judges that a policy rate path broadly consistent with the forecast in the previous report provides a reasonable trade-off between the objectives of monetary policy," it said.
The bank expects the policy rate will remain at around 4.5% until autumn 2024 before gradually falling.
The decision comes after the Federal Reserve held rates steady on Wednesday and said it still expects to cut interest rates three times this year. The Swiss National Bank surprised earlier Thursday with a 25 basis points rate cut.
Write to Dominic Chopping at dominic.chopping@wsj.com
(END) Dow Jones Newswires
03-21-24 0537ET
