What is the Norwegian krone (NOK)?
The Norwegian Krone (NOK) is the official currency of Norway. NOK is short for currency transactions in pairs, such as USD / NOK for trading US dollars against the Norwegian krone.
- The Norwegian Krone (NOK) is the national currency of Norway.
- The crown has been the main currency used in Norway since 1875.
- The USD / NOK pair is the fourteenth most traded currency in the currency markets.
Understanding the Norwegian krone
The Norwegian krone is the official currency of the nation of Norway. The word Crown translates as crown in English.
A single unit of currency is called a crown, while the plural form, also spelled crown, is pronounced “KRO-nuh” or “KRO-ner.” A crown is made up of 100 Øre (pronounced “UH-ray”).
The crown is between 15most traded currencies in the world. It has a close correlation with the neighboring Swedish krona (SEK) and the Danish krone (DKK). Traders once hoped that the value of the krone would be closely related to the price of oil. In fact, the crown now has a closer correlation with the euro currency than with the price of oil or even with the currencies of other Scandinavian countries.
The banknotes feature prominent Norwegians, such as leading scientists and artists, on the face of the coin, along with information indicating the person’s specific contribution to Norwegian culture. The reverse of each banknote represents some aspect of Norwegian art. For example, the 50-Crown The note contains a green tint, a portrait of Peter Christen Asbjørnsen on the obverse, and an artist’s interpretation of the Asbjørnsen story. A summer night in Krogskogen.
History of the Crown
The crown replaced the Norwegian speciator at a rate of four crowns for one speciator in 1875 when Norway joined the Scandinavian Monetary Union. The union was dissolved in 1914, but Norway continued to use the crown as its own currency – the Norwegian crown.
In 1940, during the occupation of the nation by Germany, the crown was attached to the German Reichsmark. It remained fixed in the German currency until 1992, although the level at which it was fixed fluctuates from time to time. Under mounting pressure from those betting against the crown, Norway’s central bank floated the nation’s currency and it remains floating today.
Because Norway is not part of the European Union, the euro is not the main currency used in the country. In the capital Oslo, US dollars or euros are accepted in some stores, but most transactions require crowns.
The central bank of Norway has issued a total of eight series of banknotes, including the October 2018 issue of the new 50-Crown and 500-Crown bills. Consumers could no longer use the 50-Crown and 500-Crown Banknotes of the previous series after October 18, 2019.
The Norwegian economy and the crown
Large oil deposits were discovered in Norway in 1969, leading to a period of prosperity that lasted even during the “stagflation” period of the 1970s. Today, Norway, with a population of only 4.6 million people , remains one of the richest nations in the world.
Norway’s economy is dependent on the oil industry, so the krone is sometimes correlated with the price of crude oil, although there have been surprising periods of a year or more where they have not been correlated.
During the 2015 oil crisis, the krone reached its lowest level since 2002, falling 20% against the US dollar in a five-month period from October 2014 to February 2015. That low even eclipsed its bottom during the Great Recession.
The krone is highly correlated with its Scandinavian neighbors, the Danish krone and the Swedish krone, and to a lesser extent with the Canadian dollar and the British pound, other currencies that tend to fluctuate with the price of oil.