What is the Norwegian Krone (NOK)? – Definition for beginners
The Norwegian Krone (NOK) is the official currency of Norway and is regulated and administered by Norges Bank, Norway’s central bank. The bank has issued a total of eight series, including in October 2018, the currency bills with units of SEK 50 and SEK 500. Consumers can continue to use the previous SEK 50 and 500 sets through October 18, 2019.
Norwegian kroner, in plural terms, is divided into 100 øre. The word krone is translated from the English word crown. Coins are available in denominations of 1, 5, 10, and 20 krone, and banknotes are available in denominations of 50, 100, 200, 500, and 1000 krone. The currency code for NOK is “ISK” and the currency symbol is “Kr”.
The frontside of the paper notes has images of famous Norwegians as well-known researchers and artists along with information showing a particular individual’s contribution to Norwegian culture. On the back of each paper note is a piece of Norwegian art. For example, 50 krone notes have shades of green, a portrait of Peter Kristen Asbjørnsen, an artist’s performance of Asbjørnsen’s story “Summer Nights in Krogskogen”.
The basics of Norwegian currency
The Norwegian krone is Norway’s main currency and is regulated by the Norwegian central bank, Norges Bank. The term “krone” is a Norwegian term meaning “crown” in English. The krone is divided into 100 ores that have been used electronically since 2012.
Norwegians pay in cash using coins and banknotes. Coins are available in different denominations, such as 1, 5, 10, and 20. Banknotes of 50, 100, 200, 500 and 1000 are in circulation. The banknotes contain pictures of prominent Norwegians who have influenced the country’s history.
Prominent Norwegians include researchers and artists, and the notes inform their contributions to the country’s culture. In the foreign exchange market, Norwegian krone uses the NOK code. The Norwegian krone is Norway’s most important currency, used by citizens to pay for goods and services.
Users can use crowns and paper coins. Coins are available in denominations of 1, 5, 10 and 20 and banknotes are available in denominations of 50, 100, 200, 500 and 1000.
Interest rates and oil prices in Norway are affected by changes in interest rates and oil prices.
The krone history
The first circulation of the crown occurred in 1875 when it replaced the speciedaler. The exchange rate at that time was 4 kroner per speciedaler. After the transition, Norway joined the Scandinavian Monetary Union, an alliance that lasted until the outbreak of World War I. During the union’s existence, the Norwegian krone served as the gold standard using 1 kilo of gold equivalent to 2,480 krones. The use of Norwegian krones as the gold standard ceased in 1931.
In 1939, the country’s currency was pegged to the US dollar (USD), but when it was occupied by Germany during World War II it was pegged to the German Reichsmark. At the end of the war, this currency was pegged to the British Pound (GBP). In 1992, the central bank moved away from a fixed exchange rate and the currency fluctuated according to the exchange rate.
Until 1875, the Norwegian speciedaler was Norway’s business currency. When Norway joined the Scandinavian Monetary Union in 1875, the currency was downgraded in favor of the krone. Other members include Denmark and Sweden.
When the monetary union was dismantled at the outbreak of World War I in 1914, member countries retained their currency names. The krone was used as the gold standard of the Scandinavian Monetary Union, and 1 kg of gold is equivalent to SEK 2,490. The standard ended in 1931, but Norway continued to maintain its federal gold reserves.
During the German occupation, which lasted until 1945, one krona was equivalent to the national reichsmark of 0.6. After the war, the kroner was pegged to the British pound at a rate of 20 pounds to 1 pound. In 1992, the Norwegian Central Bank abandoned the fixed exchange rate and adopted a floating exchange rate due to increased speculation on the Norwegian Krones in the early 1990s. The decision was triggered by an interest rate hike on the Kroner, which caused Norges Bank to lose around SEK 2 billion. The Norwegian Central Bank still fluctuates its exchange rates.
Economic impact on the value of the Norwegian Krone
As with all currencies, economic trends cause fluctuations in the value of the Norwegian krones. Currency investors can look for the Norwegian Krone when the Euro (EUR) is uncertain. Increased activity in the Norwegian Krone trade could lead to an appreciation of the exchange rate. As Norway is a major oil exporter in Western Europe, changes in world crude oil prices also affect the value of the Norwegian Krone.
Norway’s shipping, hydro, fisheries and industry contribute to gross domestic product (GDP). However, it is interesting that many industries are state-owned enterprises. Historically, the kroner has been a wise investment as Norway claims to be one of the most stable economies in Europe.
Norway is one of the richest countries in the world with the highest standard of living. According to World Bank data for 2017, Norway has a very lucrative economy with a slow population growth rate of 0.9% per year. Gross domestic product (GDP) annual growth rate is 1.9% and the inflation deflator is 3.8% per year.
Norwegian Krone usage
Kroner is used throughout Norway as the main currency to pay for goods and services. Payments are also accepted in neighboring countries bordering Norway, such as Sweden and Finland.
Norwegian currency is also used in Denmark’s famous ferry ports, Hirtshals and Frederikshavn. Cross-border shopping is a common practice among Norwegians buying food, alcohol and tobacco in bulk at the border. It’s a way to save on taxes and high fees when buying these products domestically.
Norwegians and tourists visiting Norway can get their bills at ATMs, commonly known as small banks scattered across the country. Debit and credit cards are accepted in almost every store and restaurant and can be used for payment in lieu of cash.
Some stores may require customers to use a Norwegian debit card instead of an international debit card for convenience. In addition, customers can use the mobile payment app to pay at dozens of convenience stores across the country.
- The Norwegian krone is the official currency of Norway. Currency code – ISK, symbol – kr.
- Coins are available in denominations of 1, 5, 10, and 20 kronor, and notes are denominated in denominations of 50, 100, 200, 500, and 1000.
- The Krone movement began in 1875.
- Forex investors can look for Kroner when the Euro is in doubt.
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