Norway’s central bank concluded its final monetary policy meeting of the year today, holding its key interest rate steady at 4 percent as widely expected.While maintaining the current rate, Norges Bank signaled potential easing on the horizon, anticipating up to two rate cuts in 2026 and further reductions through 2028-a shift from previous guidance. The decision comes as economic indicators suggest moderating inflation and evolving conditions prompting a reassessment of future monetary policy.
Norway’s central bank is signaling potential interest rate cuts in the coming years, anticipating a reduction of up to two times in 2026 and a further cut in 2027.
Norway’s central bank will hold its key interest rate steady at 4 percent following its final monetary policy meeting of the year. The decision to maintain the current rate was widely anticipated, following two cuts earlier in the year in June and September.
Alongside the rate decision, Norges Bank released its Monetary Policy Report, outlining its economic outlook and projections for future interest rate movements. These forecasts are closely watched by markets as indicators of the central bank’s future policy direction.
The forward-looking guidance within the report has been the primary focus of attention leading up to the meeting.
Potential for Multiple Cuts Before 2028
Nils Kristian Knudsen, chief strategist at Handelsbanken, stated that the central bank is opening the door for two rate cuts in 2026, with a 50/50 chance of cuts in both June and December.
“The rate path indicates three cuts by the end of 2027, but a full 100 percent cut isn’t priced in until March 2028,” he said.
He attributes downward pressure to domestic demand, while the exchange rate is also contributing to keeping rates elevated.
Norges Bank: 1–2 Cuts Next Year
In a press release, the central bank indicated it anticipates further rate reductions during the next year, should the economy evolve as projected.
“We are not in a hurry to lower interest rates,” said central bank governor Ida Wolden Bache.
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Earlier this fall, Norges Bank signaled it would likely implement one cut per year for the next three years. The previous rate path from September indicated a cut wouldn’t arrive until the summer or fall of 2026.
Central bank governor Ida Wolden Bache said in November that they “are not in a hurry to lower interest rates.” The rate was previously lowered twice earlier this year, in June and September.
