Norwegian December core inflation stood at 3.0%, in line with Norges Bank's forecast, but below consensus at 3.2% and the central bank expects inflation to stay the same for some months.

As food prices were cut before Christmas, they witnessed a drop down by close to two tenths. The central bank is not concerned with inflation exceeding 2.5% target but focuses on how the drop in Norwegian oil sector will affect the economy. The NOK has weakened significantly as the oil prices have fallen since the December meeting.

"The NOK is currently close to 2.5% weaker than Norges Bank's forecast, but that should not prevent Norges Bank from cutting rates in March, like they signalled in the Monetary Policy report in December" - Nordea Bank