Norges Bank Holds Policy Rate at 4.50%, Signals First Cut in September 2024

Norges Bank held its policy rate at 4.50% on 21 March 2024, leaving borrowing costs unchanged as the Monetary Policy and Financial Stability Committee assessed that inflation remained too elevated to justify an immediate move towards easing.

In its monetary policy assessment published on the same day, Norges Bank said the policy rate would likely remain at 4.5% until the autumn before gradually moving down, a path consistent with a first cut around September 2024.

KRONE A KEY CONSIDERATION The Committee said it was concerned that lowering the policy rate prematurely could weaken the krone and keep inflation high.

INFLATION OUTLOOK

The hold at 4.50% reflected Norges Bank's assessment that domestic price pressures had not yet subsided sufficiently to warrant a cut. Inflation in Norway has been driven in part by high wage growth and the krone's depreciation through 2023.