FX.co ★ Norges Bank Lowers Interest Rate by 25bps

In September 2025, Norges Bank lowered its key policy rate by 25 basis points, bringing it to 4.0%, a move anticipated by the markets. The bank also indicated that it would continue to reduce rates over the next year, assuming the economy unfolds as expected. This action represents the second rate reduction in five years, following a brief pause in August. The bank's committee highlighted that the current policy stance remains restrictive, which has helped in cooling the economy and curbing inflation. Simultaneously, rising unemployment has necessitated a reduction in interest rates to foster economic growth after a lengthy period of elevated borrowing costs. The committee further observed that, given the present economic outlook, the policy rate is expected to gradually decline to approximately 3% in the coming years, with the inflation rate anticipated to stabilize around 2% by 2028.