**BREAKING: Norges Bank Holds Rates at 4.25% as Inflation Cools, November Hike Still Possible**
Norway’s central bank maintained its policy rate at 4.25 percent in its August decision despite cooling inflation data, according to analysis from Nomura economists released today. The hold comes as CPI-ATE inflation softens, prompting the bank to delay further tightening despite keeping a potential hike on the table.
Nomura now forecasts any additional rate increase would come in November rather than sooner, though analysts note the probability is shifting toward no further moves at all. The firm projects Norway will keep rates elevated significantly longer than most developed markets, with no cuts expected until September 2027.
The decision affects Nordic currency traders and fixed income positions in Norwegian sovereign debt. The krone may face pressure as rate hike expectations diminish while competing central banks begin cutting cycles.
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FXnCO Insight
** Traders should monitor NOK volatility into November and consider long-duration Norwegian bond exposure as the terminal rate window narrows and the extended hold period comes into clearer view.
Source: FXStreet