MNI BRIEF: Norges Bank Announces FX Sales Plan, Hits Krone

The Norges Bank will purchase the equivalent of NOK2 billion per day of foreign exchange on behalf of the government in April, the central bank announced Thursday, sending EUR/NOK surging as high as 9.7105. The Norwegian krone had appreciated in recent weeks following the war in Ukraine and the rise in oil prices. Thursday's announcement is part of Norway's fiscal strategy rather than direct FX intervention.

The Norwegian government receives large flows of foreign currency and Krone, which are used to both finance its non-oil budget deficit and to boost the sovereign wealth fund, Norges Bank managing the FX transactions.

Norges Bank forecast that the krone on its trade weighted index would hold fairly steady in its March Monetary Policy, and this announcement appears to be a downside currency, and upside inflation, surprise to that forecast.