Norwegian Krone Slides Following Norges Bank’s First Rate Cut in Five Years

2025-06-19 10:26 By Joana Ferreira 1 min. read

The Norwegian krone weakened to 10 per USD after briefly reaching 9.86 on June 17, its strongest level since February 2022, following Norges Bank’s surprise decision to cut interest rates.

At its June meeting, Norway’s central bank reduced its policy rate by 25 basis points to 4.25%—the first cut in five years—and signaled further reductions ahead due to a more benign inflation outlook.

This move is viewed as a “cautious normalization” of the central bank’s policy, which has remained significantly higher than those of many other countries.

Governor Ida Wolden Bache emphasized that a restrictive monetary policy remains necessary, albeit less stringent than before.

She hinted at additional rate cuts, forecasting the policy rate to fall to just below 4% by the end of 2025 and around 3% by late 2028.

Core inflation eased more than expected to 2.8% in May but still remains above the central bank’s 2% target.



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