Norway’s central bank has announced it will buy foreign currency for its state investment fund in April, for the first time in almost nine years, amid rising oil and gas revenues, weakening the hryvnia.
Norges Bank plans to buy 2 billion kronor ($ 231.9 million) in foreign currency, which it will invest abroad through the fund, which is already the largest in the world, with assets of 1.3 trillion. Dollars.
Rising oil prices, which are Norway’s main export, have led to a large influx of tax revenues that have exceeded government spending.
Economists have said that a shift in the foreign exchange market, and therefore the sale of kroner, could weaken the currency.
Norges Bank stressed that transactions are made for fiscal reasons on behalf of the government, and should not be considered market intervention.
The central bank last sold kroner in the third quarter of 2013, but was forced to start buying the following year by exchanging foreign currency earned from oil and the krona fortune fund to finance Norway’s increased fiscal expenditure. .
The central bank has since continued to buy crowns on a daily basis, except for a few months when it did not buy or sell any currency.
According to a statement from the central bank, “on behalf of the Ministry of Finance, Norges Bank is conducting the necessary foreign exchange transactions related to oil revenue expenditures, in addition to the central government budget and savings in the state treasury,” the central bank said. bank.
Source: Capital
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