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Norges Bank keeps policy rate at 4.25% as tone turns less hawkish

TD Securities says the softer CPI profile led it to remove its September hike call, while treating any oil-driven hike as a non-base scenario.

Reported · Written up by our desk · Central Banks

Norway’s central bank kept its policy rate unchanged at 4.25% in August, but signaled a less hawkish stance than it did in June, according to TD Securities’ assessment cited by FXStreet.

TD Securities pointed to softer underlying inflation, with CPI running at 2.7% year over year, saying that reduced the need for additional tightening.

In its view, the guidance shifted from a hike being “likely” to one that “may” be needed, and TD Securities removed its September hike call, expecting the rate to remain at 4.25%.

The analysis also outlined an oil-driven hike possibility as an optional, non-base case rather than part of the expected path.

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