By Dominic Chopping

Norway's central bank kept its key policy rate on hold at 4.5% Thursday and said it will likely stay at that level for some time ahead as high wage growth and last year's krone depreciation will probably prevent a quick fall in inflation.

The decision was in line with both a Dow Jones poll before the decision and Norges Bank's guidance from its last meeting.

Inflation is markedly above target and although underlying inflation has declined further it is still high, the bank said.

"The committee assesses that the policy rate is now sufficiently high to return inflation to target within a reasonable time horizon," Governor Ida Wolden Bache said.

The bank said that to ensure inflation comes down it will likely need to maintain a tight monetary policy stance for some time ahead, but further out, when inflation falls back and economic conditions warrant, the committee can start lowering the policy rate.

No new forecasts were presented at the meeting, but in the previous monetary policy report Norges Bank's forecast indicated that the policy rate will remain at around 4.5% until autumn 2024 before gradually falling.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

January 25, 2024 04:38 ET (09:38 GMT)