Norway Central Bank Keeps Rate on Hold at 2.75%; Sees Next Hike in March

By Dominic Chopping

Norway's central bank kept its key policy rate unchanged at 2.75% on Thursday and said it will most likely raise the rate further in March.

A slim majority of economists polled by The Wall Street Journal had expected rates to remain on hold, but several had expected a hike to 3.00% after the central bank said in December that it would most likely raise the rate in the first quarter of 2023.

Norges Bank said monetary policy has started to have a tightening effect on the economy, which could suggest a more gradual approach to policy rate setting, but noted the policy rate will need to be increased somewhat further to bring inflation down toward target.

The labor market appears to have been a little tighter than projected since the central bank's December meeting and continued pressures in the Norwegian economy may keep inflation elevated, but there are prospects that energy prices will be lower than expected and global inflationary pressures appear to be easing, it said.

"The future policy rate path will depend on economic developments," Governor Ida Wolden Bache said.

No fresh forecasts were presented, but the bank recently indicated a policy rate of around 3% in 2023 before falling gradually from the latter half of 2024.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

01-19-23 0433ET