OSLO, Oct 6 (Reuters) - The Norwegian central bank will increase its daily purchases of Norwegian crowns next year, two economists said on Thursday, after the government presented a 2017 budget that will use more money from the wealth fund than in the current year.
The central bank is selling foreign exchange because the government’s transfers to its sovereign wealth fund have been smaller than before and the national budget is using more of the country’s oil-related income.
On Thursday the government said it would use 3.0 percent of the value of the sovereign wealth fund in 2017, or 225.6 billion crowns, up from 2.8 percent and 205.6 billion crowns this year.
“We expect daily crown purchases by the central bank of one billion crowns per day,” DNB Markets said in a note to clients after the budget was presented. Bank SEB said it would expected daily crown purchases to increase, without specifying a level.
Nordea Markets separately said the central bank may raise its purchases as a result of the budget, but added it was “far from obvious”.
The central bank has been selling foreign exchange equivalent to 900 million Norwegian crowns ($111.81 million) per day since January.
$1 = 8.0494 Norwegian crowns Reporting by Ole Petter Skonnord and Camilla Knudsen, editing by Gwladys Fouche and Terje Solsvik
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