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Norway Today

Norwegian news in English

Saturday, November 23, 2024

Norway's Currency Dilemma: Balancing Act

Published: 2024-08-16

Norway faces a challenging economic landscape as the weak krone impacts both consumers and businesses.

Central Bank Governor Ida Wolden Bache emphasizes the importance of a floating krone to maintain low inflation and high employment.

Fixing the krone to the euro, as some suggest, would limit the bank's ability to use interest rates effectively.

Meanwhile, businesses like Grans Brewery are forced to raise prices due to increased costs of imported goods, highlighting the krone's impact on everyday expenses.

Despite calls for intervention, Bache remains cautious, citing limited and short-lived effects of currency market interventions.

The Central Bank aims to stabilize inflation at 2%, but the weak krone and rising wages pose ongoing challenges.