– I still think that the euro is worth ten kroner. Five euros is fifty kroner. Tove Austdal is going to Spain, and is not significantly worried about the record weak krona. Not right now, anyway. – When I’m on holiday, I’m on holiday, she says jokingly. The formula book still needs to be updated. One euro is no longer equal to ten kroner, but twelve. This has not happened before, with the exception of a couple of days during the corona pandemic. Tove Austdal and her family do not intend to let the weak krone put an end to the holiday fun. Photo: Arild Eskeland / news Much more expensive for Norwegians on holiday – A few days during the pandemic it was weaker than where we are now. If we ignore that, then we are at the weakest level ever. That’s what Kyrre M. Knudsen, chief economist at Sparebank 1 SR-Bank, says. He believes Norwegians on holiday abroad will notice in their wallets that the Norwegian krone is now extra weak. A weak krone may become the new normal. The experts believe that we have to look far beyond the purchasing power we had in the US and the eurozone ten years ago. You can read more about that here. – It’s the summer holidays, and many people are probably aware that it has become much more expensive to holiday abroad. If you spend NOK 1,000 at a restaurant in a euro area now, it has become NOK 50-60 more expensive than it was just a few weeks ago. Knudsen says that the Norwegian krone strengthened until a couple of weeks ago. This was due to the prospect that, during the spring, Norway would keep the policy rate higher somewhat longer than elsewhere in Europe, and in the USA. What affects the krone exchange rate? According to Statistics Norway, there are some factors that economists believe influence the krone exchange rate, in the short and long term. Short term Global unrest The interest rate differential against abroad Norges Bank’s krone sales Long term The price level in relation to abroad The price of oil Foreign direct investment Source: Statistics Norway – So it has weakened quite a lot since the beginning of July. At that time we were well below 11.50 against the euro, and now we have been up to twelve kroner. So there has been quite a lot of movement in a short period of time. – That is the disadvantage. Abroad will be much more expensive. Nevertheless, a weak krone exchange rate is not negative for everyone. Chief economist Kyrre M. Knudsen points to both positive and negative aspects of the weak krone exchange rate. Photo: Sparebank 1 Makes good money from exports – This is great news for everyone who exports goods and has costs in Norway. The salmon companies sell salmon in euros, and Equinor sells oil and gas in dollars and euros. This means that those who export earn much more. In addition to being sensationally weak against the euro, it has been over 50 years since the krone was weaker against the British pound. The fact that you see large fluctuations in the krone exchange rate in the short term is simply something to be faced with, the economist believes. – The experience from this is that we must be prepared. The krone can vary and fluctuate quite a lot in the short term. Now we are on the weak side, but that also means that we could see a significantly stronger krone if things were to turn around. Published 24/07/2024, at 20.02 Updated 24.07.2024, at 20.14
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The krona is today record weak against the euro, with the exception of during the pandemic – news Rogaland – Local news, TV and radio
