DEFINITION of 'NOK'
NOK serves as the abbreviation for the Norwegian krone on foreign exchange markets. Norges Bank, the central bank of Norway, regulates the supply of the Norwegian krone through its economic policies. A total of seven series of banknotes have been issued by Norges Bank with an eighth series slated to appear in the second quarter of 2017.
BREAKING DOWN 'NOK'
The Norwegian krone, or kroner for the plural term, subdivides into 100 øre. The word "krone" translates into English as "crown." Coins come in denominations of 1 krone along with 5, 10 and 20 kroner. Bills feature denominations of 50, 100, 200, 500 and 1,000 kroner.
Series VII banknotes started to appear in circulation from 1994 to 2001. Banknotes feature prominent Norwegians, either scientists or artists, on the front along with something that shows the person’s contribution to Norway’s culture. The back of each bill depicts some aspect of Norwegian art. For example, the 50-krone note contains a green tint, a portrait of Peter Christen Asbjørnsen on the front and an artist’s rendering of Asbjørnsen’s story “A summer night in Krogskogen.”
Several economic trends make the Norwegian krone fluctuate in value. Norges Bank’s key interest rate, which was 0.50% ahead of a policy meeting in May 2016, may keep the krone lower when investors seek other ways to make money. Currency investors may seek the krone when the euro’s value is in doubt due to various economic factors in the Eurozone such as a debt crisis or economic instability in other parts of Europe. Crude oil prices also affect the krone’s value versus other currencies as Norway is western Europe’s leading oil exporter.
Other economic activity in Norway supports the value of the krone. Shipping, hydroelectric power, fishing and manufacturing all contribute to Norway’s GDP even though many industries are state-owned. Historically, the krone is a good investment as Norway has one of Europe’s most stable economies.
History of the Krone
The krone started in 1875 to replace the speciedaler at a rate of 4 kroner for 1 speciedaler. Following the switch, Norway joined the Scandinavian Monetary Union, an alliance that lasted until the outbreak of World War I. From May 2015 and into April 2016, the exchange rate for $1 fluctuated between 7.5 to 9 kroner. That translates to 1 krone for around 13 cents.