Norway’s central bank held its policy interest rate unchanged at a 16-year high of 4.50 per cent on Thursday, as widely expected, and said any cuts must wait until the first quarter of next year, boosting the crown currency.

“The committee judges that a restrictive monetary policy is still needed to bring inflation down to target within a reasonable time horizon,” the central bank said in a statement.

Economists have been divided over when Norges Bank might begin to ease policy, with a majority of those polled by Reuters predicting a cut in December this year, while a minority pointed to March of 2025 as the most likely timing. “The policy rate forecast in this report implies that the policy rate will remain at 4.5 per cent to the end of 2024 before being gradually reduced from the first quarter of 2025,” the bank said.

The Norwegian crown strengthened to 11.66 against the euro at 0805 GMT, from 11.78 just before the announcement.

Norges Bank’s decision comes in contrast with recent decisions by other central banks.

The US Federal Reserve on Wednesday kicked off an anticipated series of interest rate cuts with a larger-than-usual half-percentage-point reduction, which came on the heels of recent policy easing by the European Central Bank and others.

Economists say the Norwegian central bank in its monetary policy must balance above-target inflation, exacerbated by a falling currency, with a cooling economy that now sees low overall growth.

Norges Bank in June pushed back its prediction for a policy easing to the early parts of 2025, from September of this year, and said last month rates would stay at the current level “for some time ahead” without specifying how long.

“The forecast is little changed from the June report but indicates a slightly faster decline in the policy rate through 2025,” the central bank said on Thursday.

Norges Bank lowered its economic growth forecasts for 2025, predicting GDP for the non-oil economy would expand next year by 1.1 per cent, below the 1.3 per cent growth seen in June.