OSLO – Norway’s central bank said on Thursday it will cut its daily purchase of the crown currency to zero from 700 million Norwegian crowns ($80 million) due to a larger-than-expected cash inflow from the country’s oil and gas industry.
The revised policy takes effect on Friday and lasts until the end of November, Norges Bank said.
The crown weakened on the news, falling to 9.94 per euro at 1124 GMT from 9.92 before the announcement.
The central bank normally buys currency on behalf of the government on a daily basis to make funds available for the government’s fiscal budget, exchanging currency earned from its oil and gas and its sovereign wealth fund into Norwegian crowns.
The recent spike in oil and gas prices has led to a huge direct inflow of cash to Norway, however.
“The change is due to a reduced need for transfers from the (sovereign wealth fund) to the government because of a larger-than-expected net cash flow from the petroleum sector,” Norges Bank said in a statement.
It did not say whether there were any implications for purchases beyond November.
Norway is western Europe’s largest oil and gas producer with daily output of 4 million barrels of oil equivalent.
($1 = 8.7697 Norwegian crowns)