The Norwegian Krone firmed to an intraday high against the US Dollar on Thursday, after Norway’s central bank hiked interest rates at its September meeting and said it would likely raise them once again in December.
Norges Bank raised its key policy rate by 25 basis points to 4.25% earlier on Thursday, in line with market expectations.
Norges Bank Governor Ida Wolden Bache said that there would likely be “one additional policy rate hike, most probably in December.”
The benchmark interest rate is expected to remain around 4.5% through 2024, since Norway’s inflation still exceeds the central bank’s 2% target.
The country’s annual core inflation was reported at 6.3% in August, slowing down from a 7% peak in June.
Norges Bank now forecasts that core inflation will likely slow further to 4.7% in 2024, compared with a June projection of 4.6%.
“The outcome of this meeting was clearly on the hawkish side. Higher wage growth and higher inflation for longer are the key reasons behind the upward adjustment to the rate path,” analysts at Nordea Markets wrote in an investor note, cited by Reuters.
As of 9:26 GMT on Thursday USD/NOK was inching down 0.07% to trade at 10.7746. Earlier in the session, the exotic Forex pair slipped to an intraday low of 10.7492.
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