Norges Bank is doing it right – Commerzbank

Looking at the Norwegian inflation figures published yesterday, I can only conclude: Norges Bank is doing it right. At its interest rate meeting last week, it gave no indication that the policy rate could be lowered earlier than announced in September (first cut in March 2025), even though the disinflation process has progressed since the summer. It postponed this decision until December, when it will have more data on inflation, Commerzbank’s FX analyst Antje Praefcke notes.

NOK remains under the influence of market uncertainty

“Norges Bank received the first set of data yesterday with the October figures. These confirm the basic picture that the disinflation process is gradually progressing. Although the headline rate appears to have risen again slightly (+0.6% mom), the seasonally adjusted trend continues to point downwards and is broadly consistent with the inflation target. The same applies to the core rate, although it is still proving somewhat more stubborn than the headline rate. This is a phenomenon that we are familiar with from many industrialized countries.”

“If the inflation figures for November, which will be published on December 10 and thus before Norges Bank's next interest rate meeting on December 19, do not cloud this picture, it is quite possible that Norges Bank will then also change its interest rate path when the new monetary policy report with the new projections is published and hint at a first interest rate cut as early as January.”

“This may then still lead to shifts in market expectations. For the time being, however, the NOK remains under the influence of market uncertainty and oil price developments.”