The krone has extended its advance against the euro resulting in EUR/NOK falling to briefly falling below the 9.50-level for the first time since autumn 2018. In the view of analysts at MUFG Bank, elevated price of oil is set to encourage a stronger NOK unless triggers a sharper global slowdown.

Norges Bank buys foreign currency for 1st time since 2013

“Our oil analyst expects upward pressure to build further on the price of oil in Q2 and to remain at much higher levels for the rest of this year.”

“The Norges Bank will purchase foreign currency in April for the first time since 2013 to help offset increased krone purchases by oil and gas companies for tax payments. At the same time, the krone is benefitting from the Norges Bank’s relatively hawkish policy stance. NB signalled that they will continue to raise rates this year at a quarterly pace and flagged the next 25bps hike in June.”

“We expect the krone to strengthen further until global growth concerns become a bigger concern.”