Norway’s krone weakens further
The Norwegian krone is currently at its weakest against the euro for three years, with the currency falling further due to a dip in oil prices.
A fall in oil prices from 79 dollars a barrel to 75 has contributed to a further fall in the value of the Norwegian krone against other currencies.
In recent months the Norwegian krone has performed weakly against the dollar, euro and the pound. On Wednesday, a dollar cost around 10.79 kroner, while a euro cost 11.89 kroner. Meanwhile, a pound was trading for 13.49 kroner.
With the exception of a few days in March 2020, the krone has never been weaker against the euro.
“There is no single explanation for the fall in the krone exchange rate. There are several things involved. There is general uncertainty on behalf of the world economy, with the interest rate increases we have seen over the past year. Lower oil prices also affect the krone exchange rate,” currency strategist for Nordea Dane Cekov told business and financial site E24.
Experts have also highlighted that Norway’s key policy interest rate is lower than that in the Eurozone or the US. This makes the krone less attractive to investors. Oil prices affect the Norwegian krone as the sale of oil and gas make up a large part of Norway's economy.
A weak krone spells bad news in Norway as it means less value for money when travelling abroad and higher inflation as imported goods become more expensive. Increased inflation and a weak krone generally also lead to higher interest rates.
SURVEY: How is Norway's weak krone affecting you?
However, a weak krone is good news for firms that export out of Norway and tourists travelling from countries with currencies that are trading strongly against the krone as they get better value for money when visiting the Scandinavian country.
Some analysts think the krone will bottom out towards the summer. Meanwhile, others think that the krone could remain weak for much longer.
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A fall in oil prices from 79 dollars a barrel to 75 has contributed to a further fall in the value of the Norwegian krone against other currencies.
In recent months the Norwegian krone has performed weakly against the dollar, euro and the pound. On Wednesday, a dollar cost around 10.79 kroner, while a euro cost 11.89 kroner. Meanwhile, a pound was trading for 13.49 kroner.
With the exception of a few days in March 2020, the krone has never been weaker against the euro.
“There is no single explanation for the fall in the krone exchange rate. There are several things involved. There is general uncertainty on behalf of the world economy, with the interest rate increases we have seen over the past year. Lower oil prices also affect the krone exchange rate,” currency strategist for Nordea Dane Cekov told business and financial site E24.
Experts have also highlighted that Norway’s key policy interest rate is lower than that in the Eurozone or the US. This makes the krone less attractive to investors. Oil prices affect the Norwegian krone as the sale of oil and gas make up a large part of Norway's economy.
A weak krone spells bad news in Norway as it means less value for money when travelling abroad and higher inflation as imported goods become more expensive. Increased inflation and a weak krone generally also lead to higher interest rates.
SURVEY: How is Norway's weak krone affecting you?
However, a weak krone is good news for firms that export out of Norway and tourists travelling from countries with currencies that are trading strongly against the krone as they get better value for money when visiting the Scandinavian country.
Some analysts think the krone will bottom out towards the summer. Meanwhile, others think that the krone could remain weak for much longer.
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