MNI BRIEF: Norges Bank Holds, Guides To Further Easing In 2025

Norges Bank left its key policy rate unchanged at.4.25% at its August meeting and stuck to guidance that if the economy evolves broadly as expected it would ease further this year.

The decision to leave the policy rate on hold at what was an interim meeting, without fresh forecasts, was widely anticipated, with analysts divided over whether the Norwegian central bank would be more precise about when the next cut was coming. Norges Bank offered no fresh steer on timing, with the June forecast compatible with one or two more 25-basis-point cuts in 2025 and markets pricing in a cut in September. (See MNI NORGES WATCH: Aug Hold Foreseen, Door Open To More H2 Cuts)

Governor Ida Wolden Bache said that it would likely be appropriate to continue with "cautious normalisation" of policy, and that it needed to stay restrictive with the job of tackling inflation yet to be completed. She added that the economy has evolved broadly in line with the June forecasts, meaning that one or two more cuts this year are still on the table.