Norway hints at continued rate cuts delayed until 2025, and the krona is temporarily relieved

Forex Platform- At 16:00 Beijing time on June 20 (Thursday), Norway's central bank announced that it would maintain interest rates unchanged, indicating that it would not cut interest rates further. After that, the Norwegian krone rose sharply, and the US dollar closed down 0.35% against the Norwegian krone at 10.53.

The latest guidance shows that the Norwegian central bank's first rate cut has been delayed until 2025.

Norway's central bank said it doesn't expect inflation in Norway to fall to its target rate of 2.0 percent until at least 2027, and said it would raise rates again if necessary.

Kjersti Haugland, economist at DNB, Norway's largest bank, said: "We have changed our forecast: the first cut will be in March, not December."

Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said: "Verbal guidance from the Norges Bank and the latest rate forecast reinforce the message that it will not start cutting rates until the end of the year at the earliest."

Crucially, the central bank raised its forecast for the direction of interest rates, making it clear that it does not expect to cut rates until at least 2025, the first of which was postponed from September to March 2025.

XTB analyst Kathleen Brooks said: "The Norwegian krone has risen sharply since the decision, becoming the G10 on Thursday.foreign exchange marketThe strongest currency in China. The dollar is back at its lowest level against the Norwegian krone since early June. If the Norges Bank looks like it will be a central bank that acts abnormally and delays rate cuts significantly, the Norwegian krone could continue to rise. "

"As our macro forecast does not deviate significantly from the new Norges Bank forecast, we have changed the Norges Bank's interest rate forecast to postpone the first cut from December to March," Mr. Haugland said. "We still expect two more cuts in the next two quarters, a further 25 basis points at the June and September meetings."

Dollar/Norwegian Krone Daily Chart

At 8:22 on June 21, Beijing time, the US dollar was trading at 10.54 against the Norwegian krone.

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