OSLO: Norway's central bank is expected to keep its key policy interest rate at a record-low 0.50 percent on May 3, but will probably start hiking rates for the first time in more than seven years in September, a Reuters poll showed on Friday.
Oil producer Norway is recovering from the drop in crude prices since 2014 and with cautious optimism around the housing market, economists expect the central bank to start the tightening soon, although inflation has been weaker than expected lately.
In March the Norwegian central bank said its key policy rate would most likely begin to rise gradually from a record low 0.5 percent "after summer", pointing to a potential August or September hike.
"Strong growth and rising capacity utilization suggest that the need for very accommodative monetary policy has diminished," SEB economist Erica Blomgren told Reuters.
"Inflation remains subdued, but the bank has proven to overlook short-term volatility in inflation and instead focusing on the long-term trajectory," she added, emphasising that "the pace of rate hikes will nonetheless be slow by historical standards".
The central bank's next full monetary policy report is not due until June 21 and there will be no news conference after next week's meeting.
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