> ## Content Index
> Fetch the complete content index at: https://www.theglobalbanker.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# Norges Bank Keeps Rates at 4%, Signals Hikes Ahead
- URL: https://www.theglobalbanker.com/norges-bank-keeps-rates-at-4-signals-hikes-ahead/
- Published: 2026-03-26T21:32:42.000Z
- Updated: 2026-10-24T12:28:26.000Z
- Description: Norges Bank's Monetary and Financial Stability Committee kept the policy rate unchanged at 4% at its 25 March meeting and said it will likely be appropriate to raise the rate at one of the forthcoming meetings.
- Author: TGB Editorial Team
- Tags: Central Banks, Europe

Norges Bank’s Monetary and Financial Stability Committee decided at its meeting on 25 March 2026 to keep the policy rate unchanged at 4 percent. The Committee said its assessment of the inflation outlook implies that it will likely be appropriate to raise the policy rate at one of the forthcoming monetary policy meetings. Governor Ida Wolden Bache emphasized the shift, stating, “Inflation has remained above target for several years, and the outlook indicates that inflation will be higher ahead than previously projected. Uncertainty is greater than normal due to the war in the Middle East, but the Committee judges that it will likely be necessary to raise the policy rate at one of the forthcoming monetary policy meetings.”

#### INFLATION PERSISTENCE PROMPTS HOLD

Since the monetary policy meeting in December, the Committee has noted several developments. Inflation has surprised to the upside, running markedly higher than projected, while wage growth is projected to be higher this year than projected in December. Higher wage growth will likely restrain disinflation ahead, the Committee noted. “The Committee judges that a tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon,” the Committee said in its press release. Capacity utilization in the Norwegian economy remains steady near normal levels. The Committee placed emphasis on the fact that inflation has remained above target for several years now and that there are prospects for higher inflation ahead than previously projected.

Counterbalancing these pressures is the Norwegian krone’s appreciation, which is poised to curb imported inflation. Yet, the overall inflation outlook points to the need for higher rates. Last year, the policy rate was reduced from 4.5 to 4 percent, and the Committee said the tightening of monetary policy in recent years has contributed to cooling down the Norwegian economy and to dampening inflation. As Bache said in the press release, “Norges Bank is tasked with keeping inflation close to 2 percent over time.” 

#### OIL PRICE VOLATILITY WEIGHS HEAVY

The war in the Middle East has led to high volatility in energy and financial markets. There have recently been wide swings in energy prices and the krone exchange rate. The outlook is subject to greater uncertainty than normal due to the war in the Middle East. The unexpectedly high inflation in recent months makes it difficult to assess underlying inflation pressures, and the uncertainty surrounding oil and gas prices is unusually elevated. The Committee therefore wants to await further information on the prospects for inflation.

If the outlook indicates higher inflation than currently projected, “a higher policy rate than currently envisaged may be required,” the statement warns. Conversely, weaker labor markets or faster disinflation could justify lower rates. The policy rate forecast has been revised up since December and indicates an increase in the policy rate to between 4¼ and 4½% by the end of this year.

#### ENERGY PRICES AND THE KRONE

Oil and gas prices have increased sharply, and higher energy prices will likely reduce global growth and push up inflation both abroad and in Norway. The krone’s strength mitigates some import costs, yet wage growth—projected higher than in December—poses challenges. If energy prices remain elevated or move higher, inflation pressures may build up further.

Norges Bank’s March Monetary Policy Report, released alongside the decision, details revised projections. With a policy rate in line with the forecast, inflation is expected to decline from next year and reach 2.0% in 2029\. A higher policy rate will cool the economy somewhat, and registered unemployment is projected to edge somewhat higher to around pre-pandemic levels.

#### OUTLOOK

The decision, taken at the Committee's meeting on 25 March, was announced on 26 March. Norges Bank now judges that a tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon, and says that the inflation outlook indicates that an increase in the policy rate will likely be required.

As from this decision, a “Summary of the Committee’s deliberations” will also be published, as announced on 20 March 2026\. The future path of the policy rate will depend on economic developments.

The Committee warned that high inflation over time can lead firms and households to plan for greater inflation persistence, and that inflation may then become entrenched. Norges Bank will hold a press conference following the monetary policy decision in May 2026.