Norway Interest Rate

The Norges Bank left its key policy rate unchanged at 4% for a second straight meeting in December 2025, as widely expected, and indicated it is not in a hurry to lower rates. The bank emphasized that a restrictive monetary policy remains necessary, with inflation still above target and underlying inflation hovering close to 3% for some time, while the weaker krone contributes to raising inflation prospects. Policymakers also noted that the tightening cycle has helped cool the Norwegian economy and dampen inflation in recent years. While the outlook remains uncertain, the bank reiterated that if the economy evolves broadly as expected, the policy rate is likely to be reduced further over the coming year. Rate projections are little changed from the September report, pointing to 1-2 cuts in 2026 and a gradual decline to somewhat above 3% by late 2028.