MNI BRIEF: Norges Bank Leaves Policy And Guidance Unchanged

The Norwegian central bank's Monetary Policy and Financial Stability Committee left the policy rate unchanged at 4.5% and stuck to the line that the policy rate "will most likely be reduced in the course of 2025" without being more precise about the timing of the first cut. (see MNI NORGES WATCH: On Hold, 2025 Cut Guidance May Be Retained )

Norges Bank Deputy Governor Pal Longva warned on the risk of premature easing fuelling price increases and the committee stated that "a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon."

Norges Bank explored the likely impact of the increase in tariffs driven by the US with the Committee identifying a two-way pull, with lower global growth and more rate cuts among Norway's trading partners on the one side and on the other greater than expected krone weakness.