Fall in the value of the Norwegian Krone driven by weaker finances
Thursday, 03 October 2013
The Norwegian krone has weakened firmly against the Swedish krona in the past six months. When currency trading closed yesterday, the price stood at Nkr1 to Skr1.06, representing the lowest exchange rates this October, and also the lowest in six years.
One driver for the fall in the currency is the drop in the Norway financial position. Norway had a higher interest rates and a strong fiscal position a few months ago. Now things have changed and it is not the same.
In March 2009, the Norwegian krone was up against the Swedish Krona - Skr1.30.
Then the Norwegian currency more or less parked in between Skr1.20 and Skr1.30 - until six months ago, when the currency started falling against the Swedish krona, and even against other currencies such as the such as the British pound.
International traders appear to be leaving the Norwegian Krona and are selling the Norwegian krone as the country's financial stability remain a bit uncertain as the price of oil remain uncertain.
Norwegian Swedbank's chief economist in Oslo, Harald Magnus Andreasen told radio Sweden that the concerns that oil prices have gone down a bit, is a factor and also that the Norwegian public finances might not be as stable in the long run compared to, Sweden.
For Norwegian exports, this means a boost, but that imports would become more expensive, including shopping in Sweden. For Swedes, it would be slightly cheaper to shop in Norway but Swedes who flock to Norway to work and benefit from their strong currency could get discouraged.
by Scancomark.com Team