Norwegian Krone (NOK) Definition

What Is the Norwegian Krone (NOK)?

The Norwegian krone (NOK) is the official currency of Norway. Its regulation and circulation are controlled by the country's central bank, the Norges Bank. The bank has issued its eighth series of banknotes, including the latest in November 2019, which saw new 1000-krone bills. The year before introduced the new 50-krone and 500-krone bills and 2017 brought the new 100-krone and 200-krone bills.

As of August 2022, $1 USD is equal to roughly 9.77 NOK. A single Norwegian Krone is worth $0.10 cents.

Key Takeaways

  • The Norwegian krone (NOK), which began circulation in 1875, is the official currency of Norway.
  • The krone's regulation and circulation are controlled by the country's central bank, the Norges Bank. 
  • The Norwegian krone currency code is "NOK" and its symbol is "kr."
  • Coins come in denominations of 1, 5, 10, and 20 krone, and banknotes are divided into 50, 100, 200, 500, and 1,000 denominations.
  • The Norwegian Krone has a value of $0.10 cents as of August 23, 2022.

Understanding the Norwegian Krone

The Norwegian krone, or kroner (the plural term), subdivides into 100 øre. The english translation for the word krone is "the crown." Coins come in denominations of 1, 5, 10, and 20 krone and banknotes appear in denominations of 50, 100, 200, 500, and 1,000 kroner. The currency symbol is “kr.”

The new banknotes feature images of Norwegian maritime history on the front, while the back shows an abstract of sea and wind in the form of a cubic pattern. For example, the 50-krone note has a green tint, an image of the Utvær Lighthouse on the front, and the back features an abstract rendition of the light signal from a lighthouse as well as a the constellation Ursa Major.

History of the Krone

The first circulation of the krone came in 1875 when it became the replacement of the speciedaler. At the time, the conversion rate was four kroner for one speciedaler. Following the switch, Norway joined the Scandinavian Monetary Union, an alliance that existed until the outbreak of World War I. During the existence of the Union, the Norwegian krone on the gold standard until 1931 when it was pegged to the British pound.

In 1939 the country's currency was pegged to the U.S. dollar (USD), but during the German occupation of Norway in the Second World War, it was pegged to the Reichsmark. At the war's end, the currency was pegged to the British pound (GBP). Shortly after, the krone was pegged to the US dollar until 1971 when it free floats in the market for seven years until it is linked to a basket of currencies. Then in 1992, the central bank moved away from a fixed exchange rate, allowing the currency to float based on the foreign currency exchange rate.

The 10 Syrian pound so closely resembles the 20 Norwegian kroner that it can fool many coin-operated, automated service machines in Norway.

Economic Impact on the NOK's Value

As with all currencies, economic trends trigger fluctuation in the value of the Norwegian krone. Currency investors may seek out the NOK when the euro’s (EUR) value is in doubt. Increased activity in trading the NOK may increase the rate of exchange. Changes in the global price of crude oil also affect the NOK's value as Norway is Western Europe’s leading oil exporter.

Norway's shipping, hydroelectric power, fishing, and manufacturing all contribute to the country's gross domestic product (GDP). However, it is interesting to note that many industries are state-owned. Historically, the krone is a prudent investment as Norway stakes claim to one of Europe’s most stable economies.

Norway is one of the wealthiest countries on the globe and enjoys one of the highest standards of living. According to the latest World Bank data, Norway has a high-income economy with slow population growth at 0.5% annually. GDP growth for 2021 came in at 3.9% while the inflation deflator was at 16.9%.

Don't confuse the Norwegian Krone with the similarly-named Danish Krone (DKK) or Swedish Krona (SEK). The Norwegian krone is worth 9% more than the Swedish Krona.

Example of the Norwegian Krone

To understand the value of the Norwegian krone in Norway, it is helpful to examine the currency's buying power with respect to familiar consumer goods. According to The Economist's popular "Big Mac" Index, as of June 2022, the cost of a Big Mac in Norway averaged out to 62 krone in 2022, a figure equal to about $5.15 U.S. dollars. This is the second most expensive Big Mac in the world, just behind Switzerland.

The average monthly salary in Norway was 50,800 NOK, according to Statistics Norway, a figure that converts to $5,178. Much of that salary is subject to income taxes, which are returned to the public in the form of health care and generous welfare programs.

Is the U.S. Dollar Stronger Than the Norwegian Krone?

The U.S. dollar is stronger than the Norwegian Krone and has steadily strengthened against it since 2015. This is likely due to changes in the respective interest rates between the two countries, fluctuations in the price of oil, and the weakening of the Eurozone economy.

What Is the Norwegian Krone to USD Exchange Rate?

One U.S. dollar is equal to 9.77 Norwegian Krone (NOK) as of August 23, 2022.

Is the Norwegian Krone a Safe Haven?

The Norwegian Krone is generally considered a safe currency, in that its value is not likely to be affected by failures in other markets. Although it is occasionally affected by domestic troubles, the Norwegian economy is relatively stable and the currency is unlikely to see any sharp changes in value.

Is the Norwegian Krone a Good Investment?

Although the Norwegian Krone (NOK) is generally considered a safe and reliable currency, it falls to each individual investor to decide whether it is worth investing in.

Does Norway Use the Euro?

Norway is not a member state of the European Union, and therefore is not eligible to use the Euro. However, the Norwegian economy is closely tied to the Eurozone, and the country is a member of the European Economic Area.

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