NEWS

Norway’s central bank is revealing how it tried to support its economy at the height of the oil crisis that hit the nation in 2014.

It reached for the most powerful tool it had: the nation’s floating currency. In an interview in Oslo on Wednesday, Governor Oystein Olsen said that back then it was clear that “underpinning” a weaker krone was the quick way to support the economy, which was facing its biggest oil slump in a generation.

“In that period we were specifically engaged in that dimension and that channel in monetary policy,” said Olsen, 66, who has been governor since 2011. “The currency market has been very careful to all the signals we have presented. In that sense we might move into a more normal, slightly different, situation but the currency channel remains very important.”

The governor emphasized that the currency isn’t pegged to any specific level, and that broad factors were in play to force it lower back in 2014.

“When you have major changes in the fundamentals of the economy and there’s a good rational solid basis for a reaction in the currency market it’s hopeless to fight it,” he said. “Instead we underpinned it in monetary policy.”