Norway’s central bank raised borrowing costs to the highest level since the 2008 financial crisis and signaled it still plans another quarter-point hike in the current tightening cycle.

Norges Bank lifted its key deposit rate on Thursday by 25 basis points to 4%, the 12th increase since September 2021, as forecast by all analysts in a Bloomberg survey. It said the rate “will most likely be raised further in September,” in line with projections made in June.

The move follows favorable inflation data and a rebound in the weak krone that have relieved pressure on policymakers in the energy-rich Nordic nation that was the first among the holders of major currencies to start raising interest rates after the pandemic.

While Norway’s consumer prices have grown faster than in the euro area and its Scandinavian peers, according to harmonized figures from the Eurostat, the underlying inflation rate declined as forecast from a record high last month.

The Norwegian currency, the second-best performer in the G-10 space so far this quarter, strengthened 0.3% to 11.5108 versus the euro following the news. The decision at a so-called interim meeting wasn’t accompanied by new economic forecasts or projections for the rate path.

--With assistance from Joel Rinneby, Stephen Treloar and Veronica Ek.