Norway: Norges Bank stands pat in December
Policy rate remains at lowest level since mid-2023: On 18 December, Norges Bank held its sight deposit steady at 4.00%, unchanged for a second consecutive meeting. Rates consequently remained at an over two-year low.
Hold necessary to contain above-target inflation: Norges Bank left interest rates unchanged at the final meeting of 2025 as it deemed a tight monetary policy stance necessary to lower price pressures—inflation remained high and above target through November. It argued that cutting rates too quickly could reignite price pressures and delay inflation’s return to target. Moroever, Norges Bank opted not to hike rates to avoid restraining the economy more than necessary to cool inflation.
Rates likely to resume in 2026: Norges Bank suggested that cuts would likely resume in 2026, yet reductions will hinge on economic developments and incoming data. In line with Norges Bank, our Consensus is for monetary policy easing to resume in 2026.