Olsen Says Krone Is an Important Variable for Setting Rates

Norges Bank Governor Oeystein Olsen said policy makers take foreign exchange movements into account when setting rates as they affect the pace of inflation.

The krone is an “important variable” and currently “strong,” he said in a speech today in Moss, Norway.

The krone, this month’s best performing major currency against both the dollar and the euro, fell 0.3 percent to 7.5167 per euro and lost 0.8 percent to 5.6207 per dollar as of 3:44 p.m. in Oslo.

The central bank in December lowered its main rate by half a percentage point to 1.75 percent, its biggest cut since May 2009, to avoid excessive krone gains and guard against the fallout of Europe’s debt crisis. The currency last week touched its highest level since February 2003, as investors fled the debt-plagued euro area and flocked to Norway’s AAA rated assets.

To contact the reporter on this story: Josiane Kremer in Oslo at jkremer4@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net

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