Norges Bank thus remains cautious about the timing of an initial rate cut. After all, inflation has to fall further first, and Norges Bank is obviously taking its time before it is sure that it can cut the key rate. And in the longer term, it now anticipates a slightly higher interest rate environment.

I think Norges has done a good job, as it already did back in January. The market seems to see it the same way, as the NOK traded higher immediately after the decision. Over the day, however, external factors, such as the weaker oil price, gained the upper hand again, causing the NOK to lose significant ground. It is a pity that Norges Bank's sensible monetary policy cannot be reflected in NOK prices at present.