Norway’s krone climbed to its strongest level against the euro in more than a month after the central bank today held the interest rate unchanged and signalled it’s no longer considering a cut.
Norway’s krone appreciated as much as 1.1 percent against the euro to 7.7847, the strongest level since Aug. 13, and traded at 7.825 as of 12:21 p.m. in Oslo. It strengthened against all major currencies except the South Korean won in a 17-member basket compiled by Bloomberg.
Norges Bank kept its key rate unchanged at 1.5 percent “as widely expected and the rate path was lifted, excluding any probability for a rate cut,” Erica Blomgren, an analyst at SEB AB, said in an e-mailed note to clients. “The krone forecast implies that the krone will, on average, strengthen by 1 percent until year-end.”
Norges Bank has kept rates unchanged for more than a year while signaling as recently as June that policy makers were prepared to ease to prevent krone strength from undermining their inflation targeting. Those efforts paid off last month as underlying inflation surged to 2.5 percent, hitting the target for the first time in four years.
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