Norway’s krone follows oil-price downhill

Norwegian kroner. (Thomas Nilsen/Barents Observer)
Norwegian kroner. (Thomas Nilsen/Barents Observer)
Like the Russian ruble, the Norwegian krone is diving with falling oil-prices.

Down more than 4 percent on Tuesday to parity with the Swedish krone.

The Norwegian currency has plunged to a near twelve-year low against the dollar in what most experts say is a parallel to the fall in global oil-prices. Norway’s strong economy is partly built on the oil- and gas industry.

One Norwegian krone was worth 0,98 Swedish krone Wednesday morning as the markets opened. A year ago, a Norwegian krone was worth 0,910 Swedish krone.

One euro today costs 9,43 kroner, slightly down from Tuesday when it peaked at 9,86 kroner.

The exchange rate for dollar is 7,61, according to Norway’s central bank.

Last week, Norway’s key policy rate was lowered by 0,25 percent to record-low 1,25 percent in a move the central bank says is due to weakened growth prospects for the Norwegian economy.

“Activity in the petroleum industry is softening and the sharp fall in oil prices is likely to amplify this tendency. This will have spillover effects on the wider economy and unemployment may edge up ahead. At the same time, the krone has depreciated markedly, which is helping to dampen the effects on the Norwegian economy and underpin inflation,” the bank writes in its argumentation.

Related stories from around the North:

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Finland: “Cold war looming, sanctions our best bet,” says Finland’s PM, Yle News

Iceland:  From Arctic Circle 2013-2014, a big drop in the price of oil, Blog by Mia Bennett

Norway: Why Barents oil is becoming unprofitable, Barents Observer

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Thomas Nilsen, The Independent Barents Observer

For more news from the Barents region visit The Independent Barents Observer.

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