Norway keeps rate on hold as softer inflation casts doubt on future hikes
TLT•Policy rate held at 4.25%
OSLO, Aug. 13 (Reuters) - Norway's central bank kept its policy interest rate on hold at 4.25% on Thursday, as unanimously expected by analysts in a Reuters poll, while noting that inflation has softened, casting doubt on its plan to further hike borrowing costs.
While Norges Bank said in June the rate would likely be raised at "one of the forthcoming monetary policy meetings", it now says that the future path will "depend on economic developments".
Inflation has slowed and been lower than projected this summer, which is welcome news, Norges Bank Governor Ida Wolden Bache said in a statement.
"But inflation is still too high, and it is too early to conclude that the inflation outlook has changed materially. It may thus still become necessary to raise the policy rate," she said.
The Norwegian crown weakened to 10.98 against the euro EURNOK= at 0902 GMT, from 10.93 just before the announcement.
