Investing.com -- Norway's central bank, Norges Bank, confirmed on Thursday that it is maintaining its policy interest rate at a 16-year high of 4.50%. This decision aligns with the expectations of analysts and comes with the announcement of plans to initiate cuts to borrowing costs in March 2025.
Norges Bank Governor Ida Wolden Bache, in a statement, explained that a restrictive monetary policy is still required to stabilize inflation. However, she also indicated that the time for easing monetary policy is on the horizon.
"Based on the committee's current assessment of the outlook, the policy rate will most likely be reduced in March 2025," the bank stated.
Following the announcement, the Norwegian crown weakened slightly against the euro, moving to 11.77 from 11.76 at 0938 GMT.
Norges Bank's stance on monetary policy contrasts with other Western central banks, which have already begun to cut rates this year due to slowing growth and easing inflation. Despite relatively high interest rates, Norway's economy has remained resilient, supported by factors such as increased business investments and wages, heightened government spending, and currency depreciation.
The bank also noted that the economy is performing better than previous projections indicated, while inflation pressures are more subdued. However, the outlook remains uncertain.
"There is substantial uncertainty about the outlook for both the global and Norwegian economy," the bank said.
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