The national currency of Norway is the kroon, which equals 100 era. It is freely convertible and is part of the international system for carrying out settlements on conversion operations. Its name is Continuous Linked Settlement, which in translation sounds like “a system of unified continuous calculations”. This system applies exclusively to those countries that are members of the International Monetary Fund. Since the end of the 19th century, the Norwegian krone has been one of the most stable European currencies.
This currency is issued by the country's central bank, the Norwegian Bank, which is controlled by the Monetary Policy Committee. He, in turn, is elected by the Storting (parliament) of the state.
Making coins is the main function of the Norwegian Mint. In free circulation, you can see banknotes with a face value of 50, 100, 200, 500, 1000 crowns, as well as coins of denomination 1, 5, 10, 20 crowns and 50 era.
Features of determining the Norwegian currency
In order to determine the exchange rate of Norway in relation to others, tenders are conducted on the international currency market. It depends on what supply and demand are. The name of this method is free conversion. It exists and is actively used in the international economy since in the mid-70s of the 20th century the decision on its introduction was made by the IMF member countries.
Since then, free conversion has been one of the fundamental principles of the Jamaican currency system. Its main feature is the free floating of exchange rates, the values of which depend on the supply and demand of the foreign exchange market.
Results of joining the Scandinavian Monetary Union
The currency of Norway, the kroon, was introduced in 1876. Until this time, the inhabitants of this country used speeders. The main goal of monetary reform is to create more favorable conditions for economic development. For this, accession to the Scandinavian Monetary Union, which was concluded by Sweden and Denmark in 1873, took place.
Each of the participating countries brought the value of its currency unit to the total gold equivalent and name. As a result, a fixed exchange rate was set for all of these countries.
But in spite of this, issues of monetary emissions, each country decided independently and independently. At that time it was quite difficult to determine what currency in Norway, because until 1917, the Swedish and Danish krones were freely used on these lands.
World War I
When the First World War began, the countries that were part of the Scandinavian Monetary Union refused to provide gold for their currencies. This contributed to the emergence of a significant difference between their value. The violation of parity was accompanied by the termination of the de facto Union. But there was no official decision on this.
During 1917-1933, the Norwegian government several times introduced and abolished the gold standard for its currency. Since 1931, the Norwegian currency has been tied to the pound.
Krone in the conditions of the Second World War
In 1940, the Norwegian Bank was evacuated to London, as the territory of the whole country was captured by German troops. Those branches of the bank that remained working in the occupied territory were under the control of the German authorities. They exchanged Reichsmarks for crowns at a very disadvantageous rate. This fact significantly accelerated the issue of the Norwegian krone and increased inflation.
In accordance with the Bretton Woods Treaties, there was a stable exchange rate during 1946-1971, according to which the Norwegian currency was valued in accordance with the key currency. It was a US dollar. Then, in 1972-1978, the crown rate was maintained within the framework of the “European Currency Snake”.
In 1979, the government tied the crown exchange rate to a basket of currencies. And in 1993, Norway introduced a floating exchange rate.
Current state of the crown rate
Banknotes, which in our time are in circulation, were issued in 1996-2006. Their size depends on the face value: the higher the face value, the larger the size. For example, a banknote of 50 kroons has dimensions 128x60 mm, while the parameters of a banknote of 1000 kroons are 160x80 mm. In addition, they differ in color:
- 50 crowns are emerald green;
- 100 - brown-purple;
- banknote of 200 kroons in blue;
- on a banknote of 500 kroons there are brown and olive shades;
- 1000 crowns of lilac, blue and yellow shades.
Over the past decade, there has been a constant and continuous growth of the Norwegian krone against the US dollar. In 2001, for 1 dollar, it was necessary to pay 9 NOK, and after 10 years this ratio dropped to 6 NOK.
The course that the currency of Norway has depends on the dynamics of oil prices. This is because this state is the largest exporter of this product in Western Europe. This is due to the fact that Norway depends on the situation on the energy market. The euro currency is used almost exclusively by tourists.
