Key Takeaways
- Norges Bank kept the key the policy rate unchanged at at its March meeting, a move widely expected by the market.
- Inflation pressures remain elevated, with wage growth and energy price volatility creating uncertainty in the outlook.
- The central bank now signals a likely rate hike before the end of 2026, reversing earlier expectations of a mid-year cut.
At its March meeting, Norges Bank left its policy rate unchanged at 4.00%, a decision widely expected by markets. After two interest rate cuts in 2025, the central bank says that inflation remains stubbornly above target and that a tighter monetary policy may be needed later this year.
“Uncertainty is greater than normal due to the war in the Middle East, but the Committee judges that it will likely be necessary to raise the policy rate at one of the forthcoming monetary policy meetings,” says Governor Ida Wolden Bache.
What Are the Key Norges Bank Interest Rates?
- Policy rate: 4.00%
- Overnight lending rate: 5.00%
- Reserve rate: 3.00%
Volatile Energy Prices and Wage Growth Keep Inflation High
While inflation remains elevated, Norges Bank predicts that wage growth will be higher this year than the December 2025 forecast, which will likely restrain disinflation ahead.
“On the other hand, the krone has appreciated considerably. A stronger krone will dampen imported goods inflation”, Norges Bank says.
Heightened geopolitical tensions and the war in Iran has also led to high volatility in energy and financial markets with oil and gas prices increasing sharply. Higher energy prices will likely reduce global growth and push up inflation both abroad and in Norway, the central bank says.
When Will Norges Bank Raise Interest Rates in 2026?
Norges Bank now judges that a tighter monetary policy stance is needed to return inflation to target within a reasonable time horizon, and says that the inflation outlook indicates that an increase in the policy rate will likely be required before the end of this year. That is a stark contrast to previous signals of a possible rate cut in June.
“The signal from the rate path is clear. At its peak, the path has been lifted by around 80 basis points, corresponding to just over three rate moves since the previous report,” say Marius Gonsholt Hov, chief economist, and Karine Alsvik Nelson, macroeconomist, at Handelsbanken.
“This marks a notable shift from December, when the outlook pointed toward one to two rate cuts this year, to now clearly signaling rate hikes. Market reactions were limited, as the rates market had already priced in two hikes this year,” they add.
According to Nordea, the central bank’s concern on inflation is not only due to the energy price shock meaning an increased rate would have been in the cards anyway.
“From the outset, inflation was much higher than expected and the conflict in the Middle East just marginally raised rates prospects further. This means that even if the conflict is over tomorrow, one should expect a rate hike before summer,” say Kjetil Olsen, chief economist, and Sara Midtgaard, senior macro and FX strategist, at Nordea.
They still think Norges Bank will hike its key rate to 4.25% in June and also that there is a greater chance that the interest rate is 4.5% than 4% by year-end.
The Key Norges Bank Interest Rate Decision Dates
- May 7, 2026
- June 18, 2026
- Aug. 13, 2026
- Sept. 24, 2026
- Nov. 5, 2026
- Dec. 17, 2026
