(adds currency reaction)
OSLO, Nov 18 (Businesshala) – Norway’s central bank said on Thursday it would cut its daily purchases of the crown currency to zero from 700 million Norwegian crowns ($80 million) because of expectations for massive cash flows from the country’s oil. Will give gas industry.
The revised policy takes effect on Friday and runs through 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 usually buys currency on behalf of the government on a daily basis to provide funds for the government’s financial budget, turning its oil and gas-earned currency and its sovereign wealth fund into the Norwegian crown.
However, the recent surge in oil and gas prices has resulted in a large direct inflow of cash into Norway.
“This change is due to the reduced need for transfers from the (Sovereign Wealth Fund) to the government, as there is higher-than-expected net cash flow from the petroleum sector,” Norges Bank said in a statement.
It did not say whether there was any impact on purchases after November.
Norway is the largest oil and gas producer in Western Europe, with a daily output of 4 million barrels of oil equivalent. ($1 = 8.7697 Norwegian Crown) (Reporting by Terje Solsvik, Editing by Gvladis Foche)