Norges Bank leaves policy rate unchanged

First meeting of 2026 sees no change to rates: On 21 January, Norges Bank stood pat for a third consecutive meeting, leaving its sight deposit at 4.00%. The hold matched market expectations.

Inflation remains too high for further easing: The first monetary policy decision of 2026 came as no surprise as inflation remained above-target through December. While Norges Bank stated that inflation had eased markedly, it stood pat to avoid sparking inflation by reducing rates too quickly. Moreover, the current geopolitical situation of rising tensions has generated uncertainty regarding the economic outlook, reinforcing the call for caution.

Rate cuts likely to resume in 2026: Norges Bank said that it still expected to stick with its forward guidance from December, which stated that the central bank would cut rates once or twice this year. That said, the central bank will present its updated forecasts for interest rates at its next meeting on 26 March. In line with Norges Bank’s December forward guidance, a majority of our panelists expect rates to end 2026 25–50 basis points below current levels.

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