OSLO Norway's central bank raised its benchmark interest rate by 25 basis points (bps) to 4.0% on Thursday to curb inflation, as widely expected, and said it would likely hike again in September.

All 31 economists polled by Reuters had expected a 25-basis-point hike on Thursday, and a majority of participants predicted the policy rate will hit a peak of 4.25% by the end of the third quarter this year.

"The future policy rate path will depend on economic developments. If the economy evolves as currently anticipated, the policy rate will be raised further in September," Norges Bank Governor Ida Wolden Bache said in a statement.

The crown strengthened to 11.50 against the euro at 0804 GMT, from 11.52 just before the announcement.

Norway's annual core inflation, which excludes energy costs, stood at 6.4% in July, down from a record 7.0% in June, and has remained above the bank's 2% target since February last year.

(Reporting by Terje Solsvik, editing by Victoria Klesty)