Norway Stands Firm: Central Bank Maintains 4.5% Interest Rate Amid Global Shift

Norway's central bank has kept its policy interest rate at 4.50%, matching a 16-year high, and plans to maintain it until year-end. This decision, diverging from other Western banks, underscores a commitment to control inflation. The Norwegian crown appreciated slightly following the announcement.

Norway's central bank held its policy interest rate at an unwavering 4.50% on Thursday, marking a 16-year high and aligning with analysts' forecasts. Despite a global shift towards rate cuts, the bank affirmed its decision to maintain this rate until at least the end of December, citing inflation concerns.

This stance is notably different from that of Sweden, which cut rates by 50 basis points earlier on the same day. Other central banks, like the Federal Reserve and Bank of England, are also expected to announce rate reductions soon. Interestingly, Norges Bank's assessment indicates no significant change in Norway's economic landscape since September, suggesting a potential rate decrease in 2025.

Norges Bank Governor Ida Wolden Bache emphasized that current conditions justify keeping the present rate. The Norwegian crown briefly strengthened against the euro following the announcement, reflecting cautious market optimism about the country's economic direction.

(With inputs from agencies.)