Petroleum Fund to suspend FX buying in December

NORWAY – Norges Bank is to suspend its foreign exchange purchases on behalf of the 942.4 billion-crown (114.1 billion-euro) Petroleum Fund in December due to a lack of liquidity in the markets at that time.

“Foreign exchange purchases are not planned in December 2004,” the bank said. It explained: “The international equity and fixed income markets are less liquid at the end of the year, and it is therefore undesirable to transfer capital that must be invested at this time.”

The bank has been buying millions of crowns a day in foreign exchange for the fund this year.

In a statement, it said it plans to purchase foreign exchange equivalent to 640 million crowns per day for the scheme in November. It says the daily purchases may vary somewhat from month to month.

It said: “The Petroleum Fund’s foreign exchange requirements are partly covered by the state’s direct financial interest in petroleum activities (SDFI) and partly by Norges Bank’s purchases in the market.”

The amount of allocation to the fund is established by the Ministry of Finance.

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