By Nerijus Adomaitis and Terje Solsvik
OSLO (Reuters) -Norway’s central bank kept its policy interest rate on hold at 4.0% on Thursday to combat inflation, as unanimously predicted by a Reuters poll, and said it was in no hurry to cut even if further easing was likely in the year ahead.
“Inflation has come down quite significantly from the peak but it’s still too high, it’s above our target,” Norges Bank Governor Ida Wolden Bache told Reuters on the sidelines of a central bank press conference.
“It will take some time before it is appropriate to lower the rate,” she said.
The Norwegian crown currency strengthened to 11.71 against the euro by 1049 GMT, from 11.72 just before the announcement.
INFLATION REMAINS ABOVE TARGET
Norges Bank began an easing cycle in June and cut its key rate again in September saying it aimed to reduce it once a year for the next three years, a slower pace than previously planned.
The monetary policy committee on Thursday said the outlook remained uncertain but that if the economy evolves broadly as expected the policy rate will be reduced further in the course of the coming year.
All 27 economists in an October 30-November 3 poll had expected no policy change.
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%.
“Since the previous meeting (in September), we have not got new information that would indicate that the inflation outlook is significantly changed,” Bache told Reuters.
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, kept its key policy rate unchanged at 1.75% on Wednesday as expected.
(Reporting by Nerijus Adomaitis and Terje Solsvik; editing by Gwladys Fouche and Hugh Lawson)
