Norges Bank Foreign Exchange Daily Purchase

Norges Bank Foreign Exchange Daily Purchase reflects the Bank's foreign exchange transactions associated with petroleum revenue spending.

The Norwegian government receives significant revenues from petroleum activities both in Norwegian kroner and in foreign currency. Part of the revenues is used to finance the planned central government budget deficit (Norway's budget is planned with a deficit and does not include revenues from the petroleum sector). The remaining amounts are transferred to the State Pension Fund GPFG. Since the pension fund makes all investments in foreign currency, the government's NOK revenues are exchanged for foreign currency.

If the revenue in Norwegian kroner (which mainly comes from tax receipts and dividends paid by the Equinor oil company) is not enough to cover the deficit, the foreign currency revenue is exchanged for Norwegian kroner. The relevant foreign exchange operations are carried out by Norges Bank. These foreign exchange transactions are planned and smoother throughout the year, and preliminary figures are published on a monthly basis.

An increase in foreign exchange purchases or a decrease in Norwegian krone purchases indicates that petroleum revenues are above the projected budget deficit. This may happen, for example, in situations when petroleum prices rise in the global market. Such a situation is favorable for the Norwegian economy and can therefore be seen as positive for the NOK quotes. Conversely, the situations in which Norges Bank is forced to sell more currency and to buy Norwegian kroner to finance the budget deficit may indicate a worsening economic situation.