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CURRENCY

Why Norway’s krone keeps getting weaker

The exchange rate of the Norwegian krone is becoming weaker, in a trend experts predict will continue.

Published: 17 October 2019 12:29 CEST
Why Norway’s krone keeps getting weaker
The krone is at its worst rate against the euro since the latter was launched 20 years ago. Photo: wrangel/Depositphotos<

The price of one euro in Norwegian kroner is more than at any time since the single European currency was created 20 years ago, a clear sign of the current weakness of the NOK.

On Thursday morning, Nordea Markets had the price of a euro at 10.1868 kroner, NRK reports.

That beats the previous worst exchange rate for the krone against the euro, which was 10.1695 on Christmas Eve 2008, according to the report.

“The Norwegian krone is now historically low against the euro,” Nordea Markets exchange strategist Joachim Bernhardsen told NRK.

Norway’s currency is also at its lowest level in 20 years with respect to the US dollar.

The poor exchange rate is bad news for people using their Norwegian bank accounts while travelling abroad, but good news for businesses.

Currency experts said that uncertainty relating to Brexit, international trade conflicts and global unrest are all part of the equation which has resulted in the poor position of the krone.

“We keep getting mixed signals from negotiations between China and the US, and between the EU and the UK. So two of these major points of uncertainty, Brexit and the trade war, are unresolved,” Bernhardsen said to NRK.

“We think that points towards an even weaker krone by the New Year,” he added.

The weaker krone makes foreign trips on Norwegian currency more expensive, but can boost businesses, Magne Østnor, currency strategist with DNB Markets, told NRK.

“This helps stimulate business here in Norway and thereby contributes to continued jobs growth,” he said.

As the krone sinks in value, the NOK worth of Norway’s sovereign wealth fund actually goes up, because it is listed in foreign currency.

The value of the fund in Norwegian kroner was 9,950 billion kroner on Wednesday, taking it closer to the 10,000 billion krone-mark than ever before.

READ ALSO: What are the best ways to save money in Norway?

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CURRENCY

Spanish town brings back the peseta in bid to boost spending

They haven't been legal currency in Spain since 2002 but residents in one town in Valencia can now spend any old pesetas they have hidden away thanks to a scheme aimed at boosting spending during the coronavirus crisis.

Published: 28 October 2020 14:12 CET
Spanish town brings back the peseta in bid to boost spending
Old peseta notes and coins can be exchanged until the end of 2020. Photo: AFP

The Multipaterna Commerce and Services Association has launched a campaign that allows payment to be made with pesetas in certain establishments in Paterna, a town in the Valencian Community.

The campaign, which includes hardware stores, opticians, computer and electronics stores, real estate, florists, lingerie stores and parcel kiosks, will run until December 15th. 

For the rest of Spain those who still have the old currency there is still a few months left to convert them into euros, although they can’t spend them in shops.

Spaniards have been told that they have until December 31st 2020  to exchange their pesetas for euros and that applies for both bank notes and coins.

Any notes produced during the Franco era, which ran from the end of the Civil War in 1939 until the dictator's death in 1975 can be automatically changed by the Bank of Spain.

Those issued during the conflict can also be exchanged but the process will involve them being analysed by experts to confirm their authenticity.

And any coins still in circulation at the time that euros were brought in on New Year's Day in 2002 can also be exchanged at Bank of Spain headquarters in Madrid.

The exchange rate offered  by the Bank of Spain is 1 euro = 166,386 pesetas but the bank advised that commemorative coins and notes may be worth more as collectors' items than for their face value, which is all that will be offered in the exchange scheme.

The Bank of Spain estimates that pesetas worth some €1.61 billion are squirreled away in Spanish homes, cluttering up the drawers of old desks and trunks in dusty old attics.

Many will never see the light of the day and others have become collectors' items now worth more than their exchangeable value.

Spain adopted the Euro at the start of 2002 but pesetas were still legal currency during a transition period that lasted the first three months of that year.

Exchanges can be made in person at the Banco España building on Madrid's Calle Alcala or via a postal or online service, even available to those abroad.  For more information check out the official webpage of the Banco España HERE. 

By Conor Patrick Faulkner in Valencia

 

 

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