Norway keeps interest rate on hold, eyes autumn cut

Credit: REUTERS/Gwladys Fouche

By Terje Solsvik

OSLO, March 21 (Reuters) - Norway's central bank kept its benchmark interest rate unchanged at 4.50% on Thursday, as unanimously expected by analysts, and signalled that it only plans a single rate cut this year.

"The current forecast indicates that the policy rate will continue to lie at 4.5% in the period to autumn before gradually moving down," the central bank said in a statement.

The Norwegian crown strengthened to 11.49 against the euro EURNOK= at 0905 GMT, from 11.53 just before the announcement.

The forward rate curve for the years 2024 to 2026 was largely unchanged from levels seen in December, Norges Bank's monetary policy report showed.

The central bank's forecast pointed to a first rate cut of 25 basis points in December this year, brokers Nordea Markets said in a note to clients.

Norges Bank now expects core consumer prices to rise by 4.1% this year, down from 4.8% seen in December. Core inflation stood at 4.9% year-on-year in February, an 18-month low, but still exceeding the central bank's goal of 2.0%.

The Swiss National Bank cut its main interest rate by 25 basis points to 1.50% on Thursday, a surprise move which made it the first major central bank to dial back tighter monetary policy aimed at tackling inflation.

The U.S. Federal Reserve on Wednesday said it remained on track for three rate cuts later this year, but trimmed the number of cuts expected in 2025 from four to three for a slightly shallower pace of easing.

(Reporting by Terje Solsvik, editing by Gwladys Fouche)

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