OSLO: Norway's central bank kept its key interest rate at a 16-year high Thursday and signalled it would only start cuts next year, later than its US and European peers.
Like other central banks around the world, Norges Bank raised interest rates to tame inflation, which rose following the Covid pandemic and soared further after Russia invaded Ukraine.
The European Central Bank and Bank of England started to cut their rates this summer while the US Federal Reserve followed suit on Wednesday.
The Norwegian central bank's policy rate now stands at 4.5 percent after 14 hikes since September 2021.
"We believe that there is a need to keep the policy rate at today's level for a period ahead but that the time to ease monetary policy is approaching," Norges Bank Governor Ida Wolden Bache said in a statement.
Analysts had expected policymakers to start cuts in December but Bache said "the policy rate will likely be kept at 4.5 percent to the end of the year".
The central bank said the rate will be "gradually reduced" starting from the first quarter of 2025.
Inflation in Norway has cooled but it remains above the bank's two-percent target.
And while a rate cut would give a boost to a slowing economy, the country's currency, the krone, has weakened and could further depreciate if borrowing costs are lowered. — AFP
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