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 a total of eight series of banknotes, including the latest in October 2018, which saw new 50-krone and 500-krone bills.
As of August 2021, $1 USD is equal to roughly 8.92 NOK.
- 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 "ISK" 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.
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.”
Banknotes feature prominent Norwegians, such as noted scientists and artists, on the front of the currency, along with information indicating the specific person’s contribution to Norwegian culture. The back of each bill depicts some aspect of Norwegian art. For example, the 50-krone note has 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."
Production of 1 and 2 øre coins ceased in 1972, and silver was replaced by cupro-nickel in 1920.
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 acted as the gold standard, with one kilogram of gold equivalent to 2,480 kroner. Use of the NOK as a gold standard ended in 1931.
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). 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 0.6% annually. GDP growth for 2020 came in at (-0.8%), while the inflation deflator was at (-3.7%) although these figures were likely impacted by the COVID-19 pandemic.