How the weak Norwegian krone will affect travel to and from Norway
Norway's krone has not strengthened despite several factors which should work in its favour. The currency's struggles will affect travel to and from Norway.
Norway's weak krone continues to struggle despite a recent rally in oil prices and another interest rate hike at the end of 2023.
Both factors impact the Norwegian krone's strength. Oil and gas make up a large proportion of Norway's economy, and high interest rates make the Norwegian krone more attractive to investors.
It's also unlikely the currency will recover to anywhere near previous levels anytime soon, according to experts.
"We cannot promise that the krone exchange rate will strengthen before the summer," chief economist Harald Magnus Andreassen at Sparebank 1 Markets told broadcaster TV 2 recently.
Kjersti Haugland, chief economist at DNB Markets, told business news outlet E24 that the weaker krone was the new normal for the currency. She said that while it was much stronger ten years ago, it was due to a strong economy, stable interest rate and booming oil trade.
"Now it is no longer like that. We, therefore, do not believe that the current rate is completely wrong," she said.
The krone has weakened against almost all major currencies, meaning that wherever one travels, it will likely be more expensive to travel abroad than before.
At the time of writing, one euro was trading for 11.64 kroner, a pound was equivalent to 13.63 kroner, and a dollar cost 10.92 kroner.
Dane Cekov, senior economist and currency strategist at Nordea Bank, told TV 2 there could be a significant fluctuation.
"I think you have to be prepared for major fluctuations towards the summer, and not least during the summer holidays themselves," he said.
The currency strategist said that travellers should do their best to round up, and then they may be pleasantly surprised with the exchange rate they receive.
For those travelling in the eurozone, he recommended rounding up to 12 kroner for one euro.
Cekov said the Balkan peninsula could be an attractive destination for those who want their money to go further this summer. This is because, despite some countries in the region using euros, prices were lower than other eurozone countries.
The currency strategist also suggested Turkey, although the country had been subject to hyperinflation in recent years.
When travelling to Norway, travellers can expect a reasonable exchange rate. This means the country will be cheaper than it would have been if the krone had remained strong.
For example, if a hotel room costs 1,000 kroner per night and you are paying in euros, the cost is around 85 euros per night. Meanwhile, three years ago, a hotel room costing 1,000 kroner would've been equivalent to around 100 euros.
This hotel room would have been equivalent to 86 pounds and 120 dollars in 2021, compared to 91 dollars or 73 pounds today.
Another example would be a meal in a restaurant. A dish costing 250 kroner would be equivalent to 21 euros today but was equivalent to 25 euros three years ago.
At today's exchange rate, the same meal would cost around 18 pounds, compared to 21 pounds in 2021. Similarly, the same dish would have cost 29 dollars three years ago but closer to 23 dollars today.
You can use tools online like historical currency calculators and estimate how much cheaper a trip to Norway has become over time.
Comments
See Also
Norway's weak krone continues to struggle despite a recent rally in oil prices and another interest rate hike at the end of 2023.
Both factors impact the Norwegian krone's strength. Oil and gas make up a large proportion of Norway's economy, and high interest rates make the Norwegian krone more attractive to investors.
It's also unlikely the currency will recover to anywhere near previous levels anytime soon, according to experts.
"We cannot promise that the krone exchange rate will strengthen before the summer," chief economist Harald Magnus Andreassen at Sparebank 1 Markets told broadcaster TV 2 recently.
Kjersti Haugland, chief economist at DNB Markets, told business news outlet E24 that the weaker krone was the new normal for the currency. She said that while it was much stronger ten years ago, it was due to a strong economy, stable interest rate and booming oil trade.
"Now it is no longer like that. We, therefore, do not believe that the current rate is completely wrong," she said.
The krone has weakened against almost all major currencies, meaning that wherever one travels, it will likely be more expensive to travel abroad than before.
At the time of writing, one euro was trading for 11.64 kroner, a pound was equivalent to 13.63 kroner, and a dollar cost 10.92 kroner.
Dane Cekov, senior economist and currency strategist at Nordea Bank, told TV 2 there could be a significant fluctuation.
"I think you have to be prepared for major fluctuations towards the summer, and not least during the summer holidays themselves," he said.
The currency strategist said that travellers should do their best to round up, and then they may be pleasantly surprised with the exchange rate they receive.
For those travelling in the eurozone, he recommended rounding up to 12 kroner for one euro.
Cekov said the Balkan peninsula could be an attractive destination for those who want their money to go further this summer. This is because, despite some countries in the region using euros, prices were lower than other eurozone countries.
The currency strategist also suggested Turkey, although the country had been subject to hyperinflation in recent years.
When travelling to Norway, travellers can expect a reasonable exchange rate. This means the country will be cheaper than it would have been if the krone had remained strong.
For example, if a hotel room costs 1,000 kroner per night and you are paying in euros, the cost is around 85 euros per night. Meanwhile, three years ago, a hotel room costing 1,000 kroner would've been equivalent to around 100 euros.
This hotel room would have been equivalent to 86 pounds and 120 dollars in 2021, compared to 91 dollars or 73 pounds today.
Another example would be a meal in a restaurant. A dish costing 250 kroner would be equivalent to 21 euros today but was equivalent to 25 euros three years ago.
At today's exchange rate, the same meal would cost around 18 pounds, compared to 21 pounds in 2021. Similarly, the same dish would have cost 29 dollars three years ago but closer to 23 dollars today.
You can use tools online like historical currency calculators and estimate how much cheaper a trip to Norway has become over time.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.