OSLO (Reuters) – Norway’s central bank raised its benchmark interest rate by 25 basis points to 4.25 percent on Thursday as expected to curb inflation and warned it would likely raise this rate again in December, which was unexpected.
The increase decided on Thursday was anticipated by all 30 economists polled by Reuters, and a majority of them predicted that it would be the bank’s terminal rate in its current cycle of monetary tightening.
“There will probably be a further increase in the key rate, most likely in December,” central bank governor Ida Wolden Bache was quoted as saying in a statement.
The Norwegian central bank also forecasts that the key rate will remain around 4.5% until 2024.
On the foreign exchange market, the Norwegian crown strengthened to 11.47 per euro while it stood at 11.52 just before the central bank’s announcements.
So-called core inflation, which excludes energy costs, stood at 6.3% in August in Norway, compared to a peak of 7.0% in June. However, since February 2022, it has been above the central bank’s 2% target.
(Reporting by Terje Solsvik; by Claude Chendjou, edited by Blandine Hénault)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
