FAQ - Exchange rates and foreign exchange reserves

What is an exchange rate?
An exchange rate is the price of a country's currency measured against that of another country, for example NOK per euro. The international foreign exchange market determines the exchange rate by creating balance between total demand for and supply of foreign currency.
What is meant by fixed and floating exchange rates?
With a fixed exchange rate regime, the central bank is actively involved in the purchase and sale of currency in order to maintain the official exchange rate. With a floating exchange rate, as is the case in Norway, the exchange rate will reflect supply and demand in the international foreign exchange market. The krone exchange rate will therefore reflect the international value of the Norwegian krone.
Where can I find exchange rate figures?
Daily, monthly and annual exchange rates
For exchange rates for currencies other than those listed by Norges Bank, see for example:
Oanda.com
XE Universal Currency converter
What sort of exchange rates does Norges Bank quote?
Norges Bank's exchange rates are middle rates, i.e. the mid-point between buying and selling rates in the interbank market at a given time. Close to the time when the exchange rates are quoted, Norges Bank obtains a relevant exchange rate, for example, the number of Norwegian kroner for a euro, in the interbank market from banks and electronic trading systems, and sets the most accurate market rate possible at this point in time. This rate is reported electronically to the European Central Bank (ECB). In the same way, a number of European central banks report exchange rates for other currencies against the euro. In the case of currencies not covered by this reporting, Norges Bank obtains market rates from electronic information systems and/or banks. Because an exchange rate always expresses the relationship between two currencies, reporting from the central banks of other countries is used to calculate exchange rates in Norwegian accounting.
When are the exchange rates published?
The rates are usually set at 2.15 p.m. Exceptions are Wednesday before Maundy Thursday and New Year's Eve when the rates are set at 9.30 a.m. As from 2004, exchange rates will no longer be published on Christmas Eve. Norges Bank publishes the rates on electronic information systems as soon as the calculations have been completed.
Can I trade on the basis of Norges Bank's exchange rates?
The exchange rates are only intended to serve as an indication, and are not binding on Norges Bank or other banks. Norges Bank's exchange rates are often used as a reference and for historical comparisons. Norwegian banks may have different routines for updating exchange rates used in transactions with the public. Because exchange rates are constantly changing, banks' rates may differ from Norges Bank's rates. Moreover, banks' rates have margins for buying and selling, whereas Norges Bank's rates are pure middle rates.
What are the foreign exchange reserves?
Norges Bank manages the foreign exchange reserves on its own behalf. The foreign exchange reserves shall be available for transactions in the foreign exchange market in connection with the implementation of monetary policy or in the interest of promoting financial stability. Norges Bank also manages the Government Pension Fund Global on behalf of the Ministry of Finance.
What are claims on the IMF?
The foreign exchange reserves and claims on the International Monetary Fund (IMF) together constitute Norges Bank's international reserves. Claims on the IMF consist mainly of three components: SDR accounts (Special Drawing Rights), reserve positions in the IMF and loans to the IMF (among other things bilateral loan agreements and loans in connection with Poverty Reduction and Growth Trust). The Executive Board of Norges Bank has delegated the responsibility of establishing guidelines for management of the SDR to the Governor. See also: Norges Bank's Annual Report, Chapters about Investment management and international cooperation.
What are foreign exchange market interventions?
Exchange market interventions are a central bank's purchase and sale of foreign currency using domestic currency. The purpose is to influence the exchange rate. Norges Bank is in a position to intervene in the foreign exchange market at short notice, but will not normally use interventions to influence the krone.