Norway’s krone advanced to a six-month high against the euro after the nation’s central bank kept its benchmark interest rate at 1.25 percent, the lowest on record.
The krone climbed versus all of its 16 major peers after the decision, which was forecast by 10 of 19 economists in a Bloomberg survey. The remainder predicted a cut to 1 percent. Policy makers, trying to weigh the economy’s ability to withstand a slump in oil prices, still see “prospects that the key policy rate will be lowered in June,” Norges Bank Governor Oeystein Olsen said in a statement.
“There was quite a bit of uncertainty going into the meeting,” said Keng Goh, a foreign-exchange strategist at Royal Bank of Canada in London. “An appreciation in the nokkie today is a fair reflection of that. I don’t think there’s a lot of room for it to move much further as there is a prospect of a June cut.”
The krone appreciated 1.2 percent to 8.3346 per euro at 11:22 a.m. London time, and touched 8.3128, the strongest level since Oct. 24. Norway’s currency gained 1.3 percent to 7.3376 per dollar after reaching the highest since Dec. 17.
Norway’s krone is the best-performing major developed currency over the past three months, gaining 2.7 percent, according to Bloomberg Correlation-Weighted Indexes. Sweden’s krona increased 0.9 percent in the same period, while the euro dropped 1.3 percent.