Interest rate developments abroad may have a considerable influence on movements in the krone exchange rate. The inflation outlook in Norway implies that Norway will not be the frontrunner when other countries increase interest rates. As mentioned earlier, themes shift in foreign exchange markets. Norges Bank does not have the instruments for fine-tuning the exchange rate. Normally, Norges Bank will not intervene in the foreign exchange market in order to influence the exchange rate. Foreign exchange market intervention, irrespective of whether foreign exchange is bought or sold, is not an appropriate instrument for influencing the krone over a longer period. We do not wish to act in a way that may trigger a game situation in the foreign exchange market. Foreign exchange intervention rather than a change in the interest rate may give ambiguous signals to foreign exchange operators and a game situation may arise. However, interventions may be appropriate if the krone deviates substantially from the level that the Bank judges to be reasonable in relation to fundamentals, and if exchange rate developments weaken the prospect of achieving the inflation target. Interventions may also be appropriate in response to pronounced short-term fluctuations in the krone when liquidity in the foreign exchange market falls to a very low level. Although the krone may fluctuate in the short term, when inflation is low and stable, the exchange rate will generally stabilise over time. When inflation has been higher in Norway than among our trading partners for a longer period, the krone has generally depreciated.

"2 The Federal Open Market Committee lowered the target range for the federal funds rate to 0 to ¼ percent3 and increased purchases of Treasury securities and agency mortgage-backed securities. The Board of Governors created new dollar liquidity arrangements with central banks, reflecting the global nature of the pandemic and its economic disruption.4 Together with other Federal banking agencies, the Board issued regulatory relief and guidance to banks encouraging them to meet the changing needs of customers,5 to use their capital and liquidity buffers to facilitate lending,6 and to access the discount window.7 Perhaps most prominently, the Fed has used its emergency powers in Section 13 of the Federal Reserve Act to establish programs and facilities to keep the economy running.8 The Board of Governors created the Primary Dealer Credit Facility,9 the Commercial Paper Funding Facility,10 and the Money Market Liquidity Facility to provide relief for critical wholesale markets.11 Another facility supports lending to small businesses via the Small Business Administration's Paycheck Protection Program.12 Two commercial credit facilities provide liquidity for corporate bonds.13 The Term Asset-Backed Securities Loan Facility supports the markets for student loans, auto loans, and credit card loans.14 The Municipal Liquidity Facility helps state and local governments and agencies close revenue gaps.15 And facilities specifically targeting "Main Street"16 help sustain retail businesses and may expand to assist nonprofit institutions.17 For the last several months, implementing the Board of Governors' relief initiatives has been the priority of the New York Fed and our sister Reserve Banks.