By Terje Solsvik
OSLO (Reuters) -Norway’s central bank kept its policy interest rate on hold at 4.0% on Thursday to combat inflation pressure, as unanimously predicted by analysts in a Reuters poll, and reiterated that further easing was likely in the year ahead.
“The job of tackling inflation has not been fully completed, and we are not in a hurry to reduce the policy rate,” Norges Bank Governor Ida Wolden Bache said in a statement.
The Norwegian crown currency strengthened to 11.71 against the euro by 0922 GMT, from 11.72 just before the announcement.
INFLATION REMAINS ABOVE TARGET
“The outlook is uncertain, but if the economy evolves broadly as currently envisaged, the policy rate will be reduced further in the course of the coming year,” Norges Bank said in the statement.
All 27 economists in an October 30 to November 3 poll had expected the central bank to announce unchanged rates on Thursday.
Norges Bank began an easing cycle in June and cut the policy interest rate again in September, as widely expected at the time, saying it aimed to reduce it once per year in the coming three years, a slower pace than previously planned.
Norway’s core inflation for September eased slightly to 3.0% year-on-year, down from 3.1% in August, data from Statistics Norway showed last month, but that was still above the official target of 2.0%.
“The committee’s assessment is that no new information has come in that indicates a material change to the outlook for the Norwegian economy since the monetary policy meeting in September,” Norges Bank said in its statement.
The future rate path, which was not updated on Thursday, is due to be revised in December.
The U.S. Federal Reserve last week cut its key policy rate by 25 basis points while the ECB kept rates on hold.
The central bank of Sweden, Norway’s neighbour and one of its top trading partners, held its key policy rate unchanged at 1.75% on Wednesday, as expected.
(Reporting by Terje Solsvik; editing by Gwladys Fouche and Joe Bavier)
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