The Norwegian krone weakened today as Norges Bank Governor Oeystein Olsen complained about the high exchange rate and said that the strong currency can prevent an interest rate hike.
Olsen said today:
A higher key policy rate might have curbed debt growth and demand pressures in the Norwegian economy. But in an environment of persistently low external interest rates, such a policy would likely have led to a sharp appreciation of the krone, resulting in too low levels of inflation and economic activity.
The Norwegian key interest rate stands at 1.5 percent, noticeably smaller than in many emerging economies, but far above near-zero rates in most developed nations.
USD/NOK went up from 5.7784 to 5.7860 as of 2:18 GMT today and its intraday high was at 5.7905.
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