Norway Central Bank Keeps Rate Unchanged As Expected
19 September 2024 - 8:35AM
RTTF2
Norges Bank left its benchmark rate unchanged on Thursday and
suggested that the policy rate will be kept at the current level
until the end of this year although the time to ease is
approaching.
The Monetary Policy and Financial Stability Committee, headed by
Governor Ida Bache, decided to hold the policy rate at 4.50
percent.
"The policy rate will likely be kept at 4.5 percent to the end
of the year," Bache said.
"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," the governor added.
Today's policy rate forecast suggests that the interest rate
will be gradually reduced from the first quarter of 2025. Although
the forecast is little changed from the June report, it indicates a
slightly faster fall in the policy rate through 2025.
Economic growth is expected to pick up slightly in the years
ahead and inflation is projected to approach 2 percent towards the
end of 2027.
Capital Economics' economist Andrew Kenningham said policymakers
are likely to begin cutting rates a little sooner and he has
pencilled in a first cut in December.
Further, the economist said the bank will cut rates somewhat
faster than suggested by its projections next year, at a pace close
to that which investors anticipate.
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