Article in Dagens Næringsliv 6 July 2001
The krone and the interest rate
The new mandate for monetary policy entails that we no longer have a specific exchange rate target for the krone, writes Norges Bank Governor Svein Gjedrem in Dagens Næringsliv on 6 July. Norges Bank shall set the key rate with a view to maintaining low and stable inflation. The inflation target is set at 2½ per cent. We must expect fluctuations in the krone. However, low and stable inflation will lead to expectations of stable developments in the krone exchange rate. Nevertheless, developments in the krone exchange rate are still very important when Norges Bank sets the interest rate. Norges Banks reaction to a change in the exchange rate will depend on an assessment of the effect on inflation.
6 Jul 2001 06:58