Norges Bank maintained its key policy rate at 1.50% for a second month after three consecutive rate hikes this year as inflation and capacity utilization remain close to target.

"The Executive Board's current assessment of the outlook and balance of risks suggests that the policy rate will most likely remain at the current level in the coming period," Governor Øystein Olsen said.

Inflation has been largely in line with expectations, with underlying price gains close to 2.0%. However, the krone has depreciated more than expected in recent months, which may lift imported goods inflation and boost foreign demand for domestic goods and services.

Moreover, the Norwegian economy's growth rate has been slightly below expectations and employment a little less than predicted. "In isolation, this suggests a slightly lower rate path," Olsen added.

Dane Cekov, analyst at Nordea Markets Research, said that Norges Bank was expected to be on hold in the near future. "However, the hiking bias is still present, and the rate path is now a few basis points higher in the period 2021–2022. This implies a 40% probability for a hike in H2 2020 or 2021," he added.