Norway's central bank kept its benchmark interest rate unchanged at 4.5% today, as unanimously expected by analysts, and said the cost of borrowing would likely stay at that level for some time ahead.
"The committee assesses that the policy rate is now sufficiently high to return inflation to target within a reasonable time horizon," Norges Bank Governor Ida Wolden Bache said in a statement.
Norway's central bank in December raised the benchmark rate in a surprise decision even as inflation had come off earlier highs, aiming to stamp out price pressures and shore up the currency.
"Monetary policy is having a tightening effect, and the economy is cooling down," Norges Bank said today.
"At the same time, business costs have increasedconsiderably in recent years, and continued high wage growth andthe crown depreciation through 2023 will likely restraindisinflation," it added.
Norway's core inflation stood at 5.5% year-on-year in December, a 15-month low, down from a record 7% last June but still exceeding thecentral bank's goal of 2%.
The central bank did not provide fresh economic forecasts or a new forward rate curve. Those are due to be updated when the next policy decision is announced on March 21.
