What is NOK (Norwegian Krone)?

NOK is the current ISO currency code, or currency symbol, for the Norwegian krone (NOK), the currency of Norway. Currency pairs such as the U.S. Dollar/Norwegian Krone (USD/NOK) use this abbreviation in forex price quotes.

Key Takeaways

  • NOK is the abbreviation for the Norwegian Krone.
  • The Krone is the primary currency used in Norway.
  • The USD/NOK is the 14th most traded currency in the forex markets.

Understanding the Currency Symbol NOK (Norwegian Krone)

The primary currency of Norway is the Norwegian Krone. The name krone means crown in English. An individual unit of the currency is called a krone, but the plural form, although spelled the same, is pronounced "KRO-nuh" or "KRO-ner." A krone is made up of 100 Øre (pronounced "UH-ray").

The krone is the 14tth most traded currency in the world. It has close correlations with the Swedish Krone and the Danish Krone. Traders expect that the Krone is also closely correlated with the price of oil, but in fact, the Krone has a much tighter correlation with the euro than with the price of oil or even with the other Scandinavian country currencies.

The krone replaced the Norwegian speciedaler at a rate of four kroner to one speciedaler in 1875 when Norway joined the Scandinavian Monetary Union. When the union was dissolved in 1914, Norway continued to use the krone as a separate currency—the Norwegian krone.

In 1940, when the German occupation began, the krone was fixed to the German Reichsmark, and remained fixed until 1992, although the level of what it was fixed at did fluctuate from time to time. Under mounting pressure from those betting against the krone, the central bank of Norway floated the nation's currency. It remains floated today.

Because Norway is not part of the European Union, the euro is not the primary currency used in the country. In Oslo, the capital city, U.S. Dollars or Euro may be accepted at some stores, but most commerce requires a transaction to krone and so it is worth finding a good exchange rate before visiting the country on business or touring.

Due to Norway's tight connection to the oil industry, the krone is heavily correlated to the price of crude oil, though there have been surprising periods of non-correlation with the commodity over the last decade, periods which may have lasted a year or more.

During the oil crisis of 2015, the krone reached its lowest level since 2002, falling 20 percent against the dollar in a period of five months from October 2014 to February 2015, eclipsing its previous low during the Great Recession.

The krone remains highly correlated with its Scandinavian neighbors the Danish krone and the Swedish krone, and less so (though still substantially positively correlated) with the Canadian dollar and the British Pound, other currencies affected by the price of oil.