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# Norges Bank holds policy rate at 4.25%, says a further hike may still be needed
- URL: https://www.theglobalbanker.com/norges-bank-holds-policy-rate-at-4-25-signals-more-tightening/
- Published: 2026-08-13T09:59:00.000Z
- Updated: 2026-10-02T00:50:55.000Z
- Description: Norway's central bank left its key policy rate at 4.25% on 13 August and said it may still become necessary to raise the policy rate, while noting inflation had been lower than projected.
- Author: TGB Editorial Team
- Tags: Central Banks, Europe

Norges Bank kept its policy rate on hold at 4.25% on Thursday, following a meeting of the Monetary Policy and Financial Stability Committee on 12 August, and said it may still become necessary to raise the policy rate, although inflation had slowed and been lower than projected over the summer. The decision, announced on 13 August 2026, keeps Norway's policy rate at 4.25%, following May's increase, while inflation remains above target.

The overnight lending rate remains at 5.25% and the reserve rate at 3.25%, leaving the standing facility corridor unchanged around the policy rate. 

#### COMMITTEE SAYS RESTRICTIVE STANCE STILL NEEDED

In its communication accompanying the decision, the Committee said the future path of the policy rate would depend on economic developments, and that it was too early to conclude that the inflation outlook had changed materially since June. It said a restrictive monetary policy stance was still needed to bring inflation down to target within a reasonable time horizon.

The Committee said it did not want to restrict the economy more than needed, but that inflation was still markedly above target and the rapid rise in business costs in recent years would contribute to keeping inflation elevated. It warned that high inflation over time can lead households and firms to begin planning for persistently high inflation, which could make it stickier and harder to bring down.

At its June meeting, the Committee had judged that it would likely be necessary to raise the policy rate further at one of the forthcoming meetings.

#### INFLATION SLOWER THAN PROJECTED

In July, 12-month CPI inflation was 3.0% and CPI-ATE inflation, which adjusts for tax changes and excludes energy products, was 2.7%. The bank said the krone had weakened earlier in the summer but had since appreciated a little and was broadly in line with the June assumption, while the conflict in the Middle East was still creating uncertainty about the inflation outlook.

Prices in the secondary housing market fell markedly in July, and both registered and LFS unemployment changed little in recent months. 

The next monetary policy meeting will provide an updated assessment of the outlook, with new forecasts and Monetary Policy Report 3/26 due alongside the decision on 24 September 2026\. 

The decision to keep the policy rate unchanged was unanimous.