Norway’s krone strengthened the most in more than seven weeks against the euro as the nationâ€™s central bank said it would halt foreign-currency purchases for its sovereign wealth fund.
The krone appreciated at least 0.2 percent against all of its 16 major peers. The Norges Bank said it wonâ€™t buy any foreign currency for its $650 billion fund next month after purchasing 500 million kroner ($87.6 million) a day in September and October. The central bank kept its benchmark interest rate unchanged at 1.5 percent, while pushing back plans to increase borrowing costs.
â€œNorges Bank refraining from foreign-exchange purchases in November was a big surprise,â€ Katrine Boye, a senior economist at Nordea Bank AB in Oslo, wrote in an e-mailed note to clients. â€œThe decision not to purchase in November points in the direction that the need for foreign-exchange in 2012 is already covered.â€
The krone strengthened 0.5 percent to 7.3945 per euro as of 5:07 p.m. in Oslo after gaining as much as 0.7 percent, the most since Sept. 7. It appreciated 0.5 percent versus the dollar to 5.7056.
Norwayâ€™s central bank converts oil revenue into foreign currency, which its wealth fund invests abroad to avoid overheating the domestic economy.