Norges Bank kept its key policy rate unchanged at 4.25% at its March 2025 meeting, matching economists’ and market participants’ expectations and extending its pause as officials weigh persistent inflation against signs of slower growth. The bank said the current rate level is appropriate to bring inflation back to its 2% target within a reasonable timeframe, even though headline inflation has eased from earlier peaks. Underlying price pressures, especially in services, remain elevated, while a weaker Norwegian krone has added to imported inflation. The Norwegian economy has remained supported by oil and gas revenues, but growth is expected to cool in the coming quarters. Markets interpreted the decision as a hawkish hold, with the krone trading slightly firmer against the euro and the U.S. dollar after the announcement. Money markets are pricing in a high probability of a rate cut in the second half of 2025, though Governor Ida Wolden Bache has said policy will depend on incoming data rather than a fixed timetable. The next policy meeting in May will be watched for any shift in language or projections.