The Norges Bank its key policy rate unchanged at 4% for a second straight meeting in December 2025, as widely expected, and indicated it is not in a hurry to reduce rates. The bank emphasized that a restrictive monetary policy remains necessary given that inflation is still above the target and underlying inflation has been close to 3% for some time. Policymakers also noted that the tightening cycle has helped cool the Norwegian economy and dampen inflation in recent years. While the outlook remains uncertain, the bank reaffirmed that if the economy evolves broadly as expected, the policy rate is likely to be lowered over the coming year. Rate projections are little changed from the September report, pointing to 1-2 cuts in 2026 and a gradual decline in the policy rate to somewhat above 3% by late 2028.