The Norwegian Krone firmed to an intraday high against the Euro on Friday, after Norway’s central bank left interest rates on hold at its May policy meeting, in line with market expectations.
Norges Bank left its key policy rate without change at 4.5% and said the rate would remain at the current level for “some time ahead.”
Norges Bank acknowledged that monetary policy was at a sufficiently restrictive level to have a tightening effect on the Norwegian economy and to drive inflation down to the bank’s target within a “reasonable time horizon.”
The central bank noted inflation had eased more than expected since the release of its March report. Yet, economic activity has accelerated more than expected, which warranted a longer period of restrictive monetary policy to avoid higher underlying inflation resulting from wage growth.
Norges Bank also said it was ready to raise interest rates once again in case monetary conditions appeared to be not tight enough to navigate inflation towards the bank’s target.
The Norwegian Krone was 0.31% firmer on the day against the Euro, with the EUR/NOK currency pair last trading at 11.7506.
Earlier in the session, the exotic Forex pair slipped to an intraday low of 11.7356.
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