Norway Interest Rate

The Norges Bank kept its key policy rate unchanged at 4.25% in August 2025, as expected, after a 25 bps cut in June which marked the first reduction in borrowing costs in five years. Policymakers reiterated that monetary policy remains restrictive as inflation is still above target, but signalled it will likely be appropriate to proceed with a cautious rate normalisation. While the economic outlook remains uncertain, the Bank said that if conditions evolve broadly as anticipated, further rate cuts will follow in 2025. "“The policy rate forecast we presented in June indicated one or two additional rate cuts in the course of the year. We have not drawn up new forecasts now, but the information we have received so far indicates that the outlook for the Norwegian economy has remained broadly in line with the outlook in June,” said Governor Ida Wolden Bache.