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Saturday, May 18, 2024

Historically weak krone recovers a bit

It’s been 17 years since it cost more than NOK 9 to buy one US dollar, but that’s how weak the krone was through the weekend. It regained some strength on Monday, but not much, and now interest rates may not be raised after all.

As the krone traded at around NOK 8.97 late Monday afternoon, economists noted that Norway’s central bank wasn’t clear about the outlook for interest rates after keeping Norway’s key police rate steady at 1.25 percent last Thursday.

“We have expected an increase in September (which could boost the value of the krone),” Kjersti Haugland, chief economist at Norway’s largest bank DNB, told newspaper Dagens Næringsliv (DN), “but uncertainty internationally makes it more open.” Central bank chief Øystein Olsen himself mentioned that there was increased uncertainty regarding interest rate development.

On Friday, more economists were predicting that the central bank may drop plans to raise rates, while others still think they’ll go up. That may have been behind Monday’s slight strengthening, after the krone also had fallen against the euro and the British pound. staff



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