OSLO (Reuters) – Norway’s central bank will further increase its daily purchase of Norwegian currency to 2 billion crowns ($190 million) per day from 1.6 billion crowns earlier, selling foreign currency to fund government spending, it said on Tuesday.
On March 18, the central bank had said it would increase its daily purchase of Norwegian crowns to 1.6 billion Norwegian crowns per day from 500 million crowns earlier. [L8N2BB1LP]
In order to make funds available for the government’s fiscal budget, the central bank exchanges currency earned from the oil industry and its sovereign wealth fund into Norwegian crowns.
But a forced shutdown of a range of public and private institutions in recent weeks has resulted in a surge in unemployment, while government revenue is faltering.
Following a sharp fall in the value of Norway’s crown, the central bank earlier this month said it may intervene in the market to support the currency for the first time since 1999, but has not said when or by how much.
By contrast, the daily purchases to fund the government are not counted as interventions, however.
(Reporting by Terje Solsvik, editing by Gwladys Fouche)