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Economy
In reply to the discussion: STOCK MARKET WATCH -- Friday, 8 November 2013 [View all]xchrom
(108,903 posts)28. Norway Ready to Cut Budget If Krone Too Strong, Premier Says
http://www.bloomberg.com/news/2013-11-08/norway-ready-to-cut-budget-if-krone-too-strong-premier-says-1-.html
Norways Prime Minister Erna Solberg said her government is ready to cut its budget proposal should the exchange rate prove too strong for exporters to stay competitive.
If the Norwegian krone starts to appreciate more, we have to cut back on our budget, Solberg said today in an interview in Oslo. One of the long-term goals of this government is to make sure there is competitiveness for our non-oil businesses so they become better. And one of the areas for competitiveness is investments and the exchange rate.
Solbergs government, which took office last month, today unveiled a set of proposals that targets using more of the nations oil wealth to cover the cost of tax cuts and spending on infrastructure and education. Use of Norways $800 billion sovereign wealth fund will be equivalent to 5.7 percent of trend mainland gross domestic product, up from an estimated 5.2 percent for this year, the government said.
Central bank Governor Oeystein Olsen has also deployed policy to tame the currency. Olsen, in an interview last month, said the krone played a role in his rate decisions, a stance that has helped drive down the currency by about 10 percent against the euro this year.
The krone slumped 0.7 percent against the euro to 8.1677 as of 1:35 p.m. in Oslo. Versus the dollar, it also dropped 0.7 percent to 6.0868. It was the biggest loser of the major currencies tracked by Bloomberg, after the Swedish krona.
Norways Prime Minister Erna Solberg said her government is ready to cut its budget proposal should the exchange rate prove too strong for exporters to stay competitive.
If the Norwegian krone starts to appreciate more, we have to cut back on our budget, Solberg said today in an interview in Oslo. One of the long-term goals of this government is to make sure there is competitiveness for our non-oil businesses so they become better. And one of the areas for competitiveness is investments and the exchange rate.
Solbergs government, which took office last month, today unveiled a set of proposals that targets using more of the nations oil wealth to cover the cost of tax cuts and spending on infrastructure and education. Use of Norways $800 billion sovereign wealth fund will be equivalent to 5.7 percent of trend mainland gross domestic product, up from an estimated 5.2 percent for this year, the government said.
Central bank Governor Oeystein Olsen has also deployed policy to tame the currency. Olsen, in an interview last month, said the krone played a role in his rate decisions, a stance that has helped drive down the currency by about 10 percent against the euro this year.
The krone slumped 0.7 percent against the euro to 8.1677 as of 1:35 p.m. in Oslo. Versus the dollar, it also dropped 0.7 percent to 6.0868. It was the biggest loser of the major currencies tracked by Bloomberg, after the Swedish krona.
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