LowIV Macro Policy & Sovereign Debt5 November 2026, Thursday · 12:00 TRT (UTC+3)
Norges Bank holds at 4.5% as the krone strengthens
Norway's central bank unanimously left its policy rate at 4.5% on 5 November. CPI was 3.4% in September and CPI-ATE, which strips out energy and tax effects, 3.0%. The bank wrote that the krone was stronger than assumed and would on its own act as a brake on inflation.
According to Norges Bank's statement, released at 10:00 on 5 November (12:00 TRT), the committee took the decision unanimously on 4 November. The overnight lending rate stayed at 5.5% and the reserve rate at 3.5%. Forex Fundamentals' calendar records the rate at 4.25% in August 2026, with the last change a 0.25-point hike on 24 September.
The constraint lies in domestic prices. The bank wrote that inflation in domestically produced goods and services was high and above expectations, while imported consumer goods inflation had come in lower than expected. Registered unemployment was 2.0% in October, slightly below forecast, and capacity utilisation looks slightly below normal.
On energy, spot oil prices fell while futures rose somewhat; gas and electricity prices rose in both spot and futures markets. The committee said a tight policy would be needed for some time to bring inflation back to target within a reasonable horizon. It stands ready to raise the rate if the outlook requires it. Markets price a hike by the end of the first half of 2027; the next report with new projections is due on 17 December.
Talay assessment
Bottom line
Unlike Sweden, Norges Bank has gained room to wait thanks to a strengthening currency: imported inflation is low, and the problem lies in domestic services prices. At 4.5% the rate is already tight, and the committee is keeping the door to a hike open. The most likely path is a hold on 17 December, with new projections preserving the possibility of a hike in 2027.
Likely effects
- Norwegian kronePositiveWeeks
A strong krone keeps imported inflation below the 3.4% headline, allowing the bank to skip a hike in December.
- Services inflationNegative1–6 months
With registered unemployment at 2.0%, domestic cost growth persists; a decline in CPI-ATE from 3.0% may be delayed.
- Scandinavian rate gapUncertain1–6 months
With Norway holding at 4.5% and Sweden rising to 2%, the policy gap between the two neighbours is narrowing.
Possibilities, ranked
- 1Hold in December60%
The committee stays at 4.5% and keeps the possibility of a 2027 hike in its new projections.
Watch: Rate path in the 17 December Monetary Policy Report
- 2Hike in early 202730%
If CPI-ATE stays above 3%, a 0.25-point hike comes in the first half.
Watch: October and November CPI-ATE data
- 3The krone reverses10%
If the krone weakens sharply, the hike is brought forward to December.
Watch: EUR/NOK and imported goods inflation
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- Policy rate▲ 4.50%
- CPI-ATE, September▼ 3.0%
- Registered unemployment, Oct▲ 2.0%