MediumIV Macro Policy & Sovereign Debt24 September 2026, Thursday · 11:00 TRT (UTC+3)
Norges Bank raises its policy rate by 25 basis points to 4.50%; the Riksbank holds at 1.75% but says hikes will begin this year
Norway's central bank raised its policy rate from 4.25% to 4.50% on 24 September and said it was ready to raise it again if needed. The same morning, Sweden's central bank held its rate at 1.75%, but announced that more hikes were needed than in its June forecast and that it expected them to begin this year.
According to a Newsquawk alert timed 08:00 GMT on 24 September, Norges Bank raised its policy rate by 25 basis points to 4.50%. According to the bank's decision page, the latest data show CPI inflation at 3.3%, core inflation excluding taxes and energy at 3.0% and unemployment at 2.1%. The bank wrote that oil and gas prices had risen since June owing to tensions in the Middle East and the Red Sea, and that it expects inflation to slow from 2027 and reach the 2% target in 2029. The committee said the rate would need to be kept high for some time and that it was ready to raise it again if necessary; the new rate takes effect from 25 September.
According to a Newsquawk alert timed 07:30 GMT, Sweden's central bank, the Riksbank, held its rate at 1.75% as expected, but said that for inflation to stabilise around 2% the rate would need to be raised more than envisaged in its June forecast and that hikes were expected to begin this year. According to Global Banking and Finance, markets are pricing one more hike for Norway and four more for Sweden by next spring; on the same day the Swiss National Bank left its rate at 0%. The report also notes that the central banks of the US, the euro area and Japan raised rates in September.
Talay assessment
Bottom line
The energy shock is forcing even small open economies with low inflation to tighten: Norway hiked with core inflation at 3.0%, and Sweden, though holding at 1.75%, revised its rate path upwards. This shows the global tightening wave broadening after moves by the Fed, the ECB and Japan in September. The most likely path is for Norway to pause for a while and for Sweden to deliver its first hike by the end of the year.
Likely effects
- European yield curveNegativeWeeks
Tightening by the Nordic central banks supports market expectations of a year-end ECB hike and keeps Europe's near-term rates elevated.
- Nordic currenciesPositiveWeeks
The upward revision of rate paths provides a rate differential that favours the Norwegian krone and Swedish krona against other low-yielding currencies.
- Türkiye's export demandNegative1–6 months
Tighter financing conditions across Europe could slow demand in Türkiye's largest export market.
Possibilities, ranked
- 1Norway pauses, Sweden hikes55%
Norges Bank holds at 4.50% in December, and the Riksbank raises rates by 25 basis points in November or December.
Watch: Swedish and Norwegian September inflation data (early October)
- 2Both hike30%
If energy prices stay high and inflation exceeds expectations, Norges Bank also hikes once more before the year is out.
Watch: Brent settling durably above $105
- 3Tightening halts15%
A deal on the Strait of Hormuz brings energy prices down, and both banks hold until the end of the year.
Watch: A downward revision of the rate path at the Riksbank's November meeting
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Norges Bank policy rate▲ 4.50% (+25 bp)
- Riksbank policy rate▲ 1.75% (unchanged)
- Norway core inflation▲ 3.0%