OSLO, March 27 (Reuters) - Norway's central bank kept interest rates on hold at a 17-year high of 4.50% on Thursday, in line with most forecasts, as an unexpected resurgence of inflation led policymakers to postpone their previously stated plan for a cut.
Norges Bank had said in January its policy rate would "likely be reduced" in March by 25 basis points and the governor last month stated the central bank was "approaching the time" for an initial cut.
But a majority of analysts polled by Reuters had expected the central bank to reverse course, and thus keep rates on hold, pointing to a jump in February core inflation to 3.4% year-on-year from 2.8% in January, well above the 2% target.
"The committee's current assessment of the outlook implies that the policy rate will most likely be reduced in the course of 2025," Norges Bank said in a statement on Thursday.
Norges Bank had previously projected three cuts in 2025 to 3.75%.
The Norwegian crown strengthened to 11.34 against the euro by 0907 GMT, from 11.38 just before the announcement.
"Inflation has picked up and been markedly higher than expected. If the policy rate is lowered prematurely, prices may continue to rise rapidly. Therefore, we decided to leave the policy rate unchanged now," Governor Ida Wolden Bache said in the statement.
Reporting by Gwladys Fouche, editing by Terje Solsvik
Source: Reuters