Norwegian krone drops as crude oil prices plunge

Source: Xinhua| 2018-12-20 03:24:38|Editor: yan
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OSLO, Dec. 19 (Xinhua) -- The Norwegian krone has gone through a five percent decline in last three months approaching the financial crisis level, as crude oil prices plunge during the same period, online newspaper E24 reported Wednesday.

One euro was worth 9.94 kroner and one U.S. dollar can buy 8.71 kroner Wednesday afternoon. It was a significant difference since the beginning of October, when the euro was worth 9.43 kroner and the dollar could buy 8.15 kroner.

Oil prices have lost around 30 percent of its value since Oct. 3 this year, when Brent traded at U.S. dollars 86.74 a barrel.

"Oil prices kept falling yesterday, due to fear of continuous too high production and lower demand. This took with it Norwegian krone, which is now trading at the weakest level this year," Nordea Markets, a leading capital markets operator and investment banking partner in the Nordic region, wrote in a report.

The Norwegian krone tends to fall towards the end of the year when there is little trade, the report said.

Last year before Christmas kroner was at corresponding low level -- 9.99 kroner against one euro.

However, the krone was stronger against the U.S. dollar before Christmas last year than today, which is explained by last year's oil prices, which were higher than today, the report said.

Bjorn Roger Wilhelmsen in Nordkinn Asset Management called the development a "seasonal pattern of krone".

"However, the fact is that oil prices have collapsed lately, and stock markets are under pressure globally. We are in a 'risk off' environment. The decline in the stock market is the worst we have seen in a December month for a long time," Wilhelmsen told E24.

He believed, however, that krone would recover from the beginning of 2019, which depends on developments of oil prices and stock markets.