OSLO: Norway’s central bank said it would continue to buy Norwegian kroner and sell foreign exchange in the market in November on behalf of the country’s sovereign-wealth fund.
As in October, Norges Bank said it would sell the equivalent of 250 million Norwegian kroner ($37.2 million) a day in foreign exchange over the coming month and use the kroner it receives to cover public spending.
Norway receives income from its lucrative oil industry in both kroner and foreign currency. It receives foreign currency income from its direct ownership of stakes in oil companies and Norwegian kroner mainly in taxes from oil companies operating in Norway.
Until recently the kroner income was enough to meet Norway’s public spending needs but as the country’s oil reserves have declined this is no longer the case.
The government now needs to exchange some of the forex revenue too, rather than just depositing it in the country’s sovereign wealth fund.
The central bank announces on the last working day of each month how much foreign currency it will buy or sell in the following month. It didn’t buy or sell foreign currency in this way between October 2013 and September 2014 but began again last month.
Until October 2013 the central bank sold kroner in the market but last month it began buying kroner for the first time.