Norwegian krone weakens after stock market fall

Cash banknotes kronerPhoto: Ole Berg-Rusten / NTB
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The Norwegian krone is at its weakest since December after the sharp fall on the stock exchanges on Monday.

“There are several factors that came into play at the same time,” interest rate and currency strategist Nils Kristian Knudsen in Handelsbanken told the newspaper Dagens Næringsliv.

“It is obvious to point out the sharp falls on the stock exchange,” he said, adding that there was also a large fall in oil prices on Monday. Together with uncertainty about future developments, this is a bad combination for the Norwegian krone.

Knudsen says that the krone has weakened over many years. This is good news for Norwegian export-oriented industry. He adds that it is important to see it in context – if the underlying markets become weaker, a weaker krone exchange rate will help to dampen that effect.

A weaker krone also means that imports become more expensive.

On Tuesday, both the oil price and the main index rose from the start of trading on the Oslo Stock Exchange.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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