The large commercial banks’ speculative behaviour in the foreign-exchange market acts as a stabiliser. If the krone lies on the weak side of the parity, the commercial banks will position themselves in support of the krone, and they will furthermore advise their customers to purchase krone e.g. sell export proceeds in foreign currency.
The reverse is the case if the krone is on the strong side of the central parity. All this takes place within a narrow range around the central parity. 4.