Norway's core inflation rate eased more than expected in March, Statistics Norway (SSB) data showed on Wednesday, supporting the central bank's view that interest rates will fall later this year.

Core inflation, which strips out changing energy prices and taxes, stood at 4.5% year-on-year, down from 4.9% in February and below the 4.7% expected by analysts in a Reuters poll.

The central bank in March kept its benchmark interest rate unchanged at a 16-year high of 4.50%, and signalled it may cut rates in September.

Last month, it projected year-on-year core inflation for March of 4.7%.

While below-forecast inflation could signal lower interest rates, the initial wage bargains struck for 2024 pointed to higher-than-expected increases in workers' pay, Handelsbanken said in a note to clients.

"As a result, the price and wage outlook remains fairly neutral with regards to interest rates," it added.

Headline inflation, which includes changes in energy costs and taxes, eased in March to 3.9%, while analysts in the Reuters poll had expected the year-on-year rate to fall to 4.2% from 4.5% in February.

Norway's currency, the crown, weakened to 11.59 against the euro by 0654 GMT, from 11.57 ahead of the data release. Against the dollar, the crown weakened to 10.68 from 10.66.

Nordea Markets said the central bank was likely to postpone its first rate cut to December due to Norwegian currency weakness, stronger real wage growth, a better economic outlook and higher rates abroad.

The price of food rose by 6.1% over the 12 months since March, SSB data showed. (Reporting by Greta Rosen Fondahn, editing by Terje Solsvik and Devika Syamnath)