Norges Bank Holds Key Rate Steady, Still Eyes March Cut

By Dominic Chopping

Norway's central bank held its key policy rate at 4.5% and reaffirmed that it will likely begin monetary policy easing in March, but noted concern over potential trade tariffs from the U.S.

The decision to hold was in line with a Wall Street Journal poll.

The policy rate has been at 4.5% since December 2023 and has helped to significantly dampen inflation from its peak, but a rapid rise in business costs will likely stoke inflation ahead, Norges Bank said.

The central bank said underlying inflation and unemployment have been broadly as expected since the previous monetary policy meeting, but fewer policy rate cuts abroad are now expected and policymakers said they are concerned about an increase in international trade barriers.

"Higher tariffs will likely dampen global growth, but the implications for price prospects in Norway are uncertain," it said.

U.S. President Trump has threatened new 25% tariffs on Canada and Mexico and hinted there still could be tariffs coming on China, but hasn't elaborated on tariff plans for other countries.

Norges Bank said Thursday that a restrictive monetary policy is still needed to stabilize inflation around target, but that the time to begin easing monetary policy is soon approaching.

"The policy rate will likely be reduced in March," said Governor Ida Wolden Bache.

Write to Dominic Chopping at dominic.chopping@wsj.com