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# Norway's Norges Bank holds policy rate at 4.25% and flags further tightening
- URL: https://www.theglobalbanker.com/norway-norges-bank-holds-policy-rate-4-25-flags-further-tightening/
- Published: 2026-06-18T09:11:00.000Z
- Updated: 2026-10-24T01:29:27.000Z
- Description: Norges Bank kept its policy rate at 4.25% and delivered hawkish guidance, saying it was likely necessary to raise the rate further at one of the forthcoming meetings.
- Author: TGB Editorial Team
- Tags: Central Banks, Europe

Norges Bank left its policy rate unchanged at 4.25% on Thursday and said its current assessment of the outlook implied it would likely be necessary to raise the rate further at one of the forthcoming meetings. The decision, taken by the Monetary Policy and Financial Stability Committee at its meeting on 17 June, was announced on 18 June.

Alongside the main rate, the overnight lending rate stands at 5.25% and the reserve rate at 3.25%. The committee also revised up its projection for the policy rate at the end of 2026 to just over 4.5%, and said a somewhat tighter monetary policy stance will likely be needed to return inflation to target within a reasonable time horizon.

#### HIGHER RATE PATH THAN MARCH

The March forecast had indicated an increase in the policy rate to between 4.25% and 4.5% by the end of 2026, and the rate was raised to 4.25% in May. Governor Ida Wolden Bache said that if developments turn out as currently envisaged, the policy rate will be raised at one of the forthcoming monetary policy meetings.

The committee's statement that 'it will likely be necessary to raise the policy rate further at one of the forthcoming monetary policy meetings' came as the committee said new information indicates that inflation pressures are slightly stronger than anticipated.

The committee said the krone exchange rate is broadly in line with what it assumed in March, and that the effects of the Middle East conflict on inflation in Norway will also depend on developments in the krone. 

#### OUTLOOK FOR THE NEXT MEETING

Norges Bank noted that market-implied policy rate expectations had fallen a little since March, both internationally and in Norway. The next monetary policy decision is due in August 2026 and will be followed by a press conference.

The Committee said it does not want to restrict the economy more than needed, but judges that a restrictive monetary policy stance is necessary.

The committee's updated Monetary Policy Report and press release are published on the Norges Bank website, setting out the full macroeconomic projections and the reasoning behind the higher rate path.

The committee said it will be particularly attentive to signs of inflation remaining elevated for longer than projected, in which case a higher policy rate than currently envisaged may be required. If labour market conditions become weaker than projected or inflation pressures ease faster, the policy rate may become lower than currently envisaged, it added.