FX.co ★ Norges Bank Delivers First Rate Cut in 5 Years

In June 2025, Norges Bank reduced its key policy rate by 25 basis points to 4.35%, following a prolonged period of maintaining the rate at a 15-year high since December 2023. The central bank indicated potential for further rate reductions within the year, contingent on the economy unfolding as anticipated, while acknowledging the prevailing uncertainty that hinders any definitive commitments. Officials highlighted a decline in inflation since their March meeting, suggesting it is now prudent to ease financial conditions to support economic growth. Nonetheless, the Monetary Policy Committee underscored the necessity of keeping borrowing costs at a relatively restrictive level to prevent inflation from resurging. According to the latest projections, the policy rate is anticipated to hover around 4% by the end of this year and decrease to 3% by 2028.