Norway's Steady Hold: Central Bank Maintains High Interest Rate

Norway's central bank kept its interest rate at a 16-year high of 4.50%, as expected, with plans to cut rates in March next year. The move contrasts with other Western banks, as Norway's economy withstands high rates boosted by investments, wages, and government spending amid international trade concerns.

In a widely anticipated decision, Norway's central bank has maintained its policy interest rate at a 16-year high of 4.50%. Analysts had predicted the move in a recent Reuters poll, and the bank has signaled plans to reduce borrowing costs by March next year.

The central bank governor, Ida Wolden Bache, emphasized the necessity of a restrictive monetary policy to stabilize inflation but acknowledged the approaching time to ease policies. Current assessments suggest a probable rate reduction by March 2025, she added.

Despite the high rates, Norway's economy remains robust, buoyed by business investments, increased wages, and government spending. However, the bank expressed concerns over international trade tensions, particularly between the U.S. and China, which could affect global growth and price predictions in Norway.

(With inputs from agencies.)