The Norwegian central bank maintained rates but shifted guidance to a conditional stance, reducing expectations for further tightening.
Norges Bank kept its benchmark interest rate unchanged at 4.25% but softened its hawkish bias, contributing to a decline in the Norwegian Krone. The central bank’s forward guidance shifted from signaling a likely hike to a more conditional approach, removing an explicit call for tighter policy.
Prior to the decision, markets had priced in a high probability of another rate increase following consistent hawkish signals. The shift in tone contrasts with recent communications, where the bank emphasized the need for further tightening to curb inflation.
The Krone weakened against major currencies as traders adjusted positions in response to the less aggressive stance.