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Friday, August 19, 2022

Weak ‘krone’ may get even weaker

After more than a week of trading at around NOK 9 to the US dollar, Norway’s biggest bank is predicting that the country’s currency may lose even more value. DNB Markets thinks it will cost NOK 10.20 to buy a euro around Christmastime.

The investment banking arm of Oslo-based DNB wrote in its latest economic outlook that it expects a record-weak krone by the end of the year. On Monday afternoon it cost NOK 9.97 to buy a euro and NOK 10.98 to buy a British pound. These are levels not seen for many years.

Economists remain baffled over why the krone remains so weak given Norway’s low unemployment and still-strong economy. Oil prices have dipped, but the krone was more valuable when oil was way down at USD 30 a barrel. Now oil costs just under USD 60, and interest rates are relatively higher in Norway than in many other countries.

Trade uncertainty and global political tensions crop up most often as analysts try to find answers. The weak krone, meanwhile, continues to boost Norwegian imports and attract tourists, while making life much more expensive for Norway’s own tourists abroad and students studying in the US especially.

newsinenglish.no staff

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