Norges Bank keeps policy rate at 4.25%
Norges Bank is expected to keep its policy rate unchanged at 4.25% at its August meeting. The key reason for this decision is the slower underlying inflation, which unexpectedly slowed to 2.7% year-over-year in June.
The softer inflation data has reduced the probability of additional rate hikes this year. However, rate cuts remain off the table.
The central bank’s future guidance on further hikes will be closely watched, with the possibility of an August hike now unlikely due to the soft inflation data.