Norway: Norwegian krone tumbles on falling oil prices
December 17, 2014
The Norwegian krone (NOK) has been depreciating markedly against all major currencies since October, in parallel with the sharp downward trend in oil prices. On 15 December, the NOK reached the lowest level against the euro since January 2009, trading at NOK 9.31 per EUR. This was 10.0% weaker than the level observed on the same day of the previous month. On an annual basis, the Norwegian krone lost 9.6% of its value against the euro. On the same day, the krone lost 10.8% month-on-month against the U.S. dollar to 7.48 NOK per USD, which marked the lowest trading value since 2002. On an annual basis the NOK has weakened 21.1% against the greenback. The krone also nosedived against the Swedish krona, reaching the parity for the first time in 22 years.
The krone has tumbled in the last few months in the wake of the recent fall in oil prices, which drove the Brent crude to slide below USD 60 per barrel for the first since July 2009. In an attempt to prevent a severe economic downturn in the oil-rich nation, on 11 December the Norges Bank decided to cut its main interest rate to a record low 1.25%, thereby exacerbating the freefall of the krone.