Hundreds of NOK More for a Single Shopping Cart. Shopping Up to 20 Percent More Expensive
The weakening of the Norwegian krone against the Swedish krona has made cross-border shopping noticeably more expensive. The exchange rate difference alone has increased the cost of an average shopping basket by several hundred kroner.
This is not good news for those earning in NOK but spending in other currencies.
Fot. Nils S. Aasheim/Norges Bank, Flickr.com (CC BY-ND 2.0)
Just a year ago, the NOK and SEK exchange rates were almost equal. For 100 SEK, you paid about 102 NOK. Now, a similar amount is already 109 NOK. When paying by card, the rate is even higher. According to Visa rates, it’s over 112 NOK for 100 SEK.
More Expensive Krone and More Expensive Shopping
The exchange rate change has a direct impact on prices in Swedish stores. A shopping basket worth 2,500 SEK is now about 500 NOK more expensive. That’s a 20 percent increase resulting solely from the currency exchange rate. Previously, the situation was the opposite. For years, 100 SEK cost about 90 NOK.
The weaker Norwegian currency hits the popular cross-border trade. This especially affects large grocery purchases and excise goods. The price differences that for years attracted Norwegians to Sweden have clearly diminished. For many customers, this means cross-border shopping is less worthwhile.
The weaker Norwegian currency hits the popular cross-border trade. This especially affects large grocery purchases and excise goods. The price differences that for years attracted Norwegians to Sweden have clearly diminished. For many customers, this means cross-border shopping is less worthwhile.
The Swedish krona is gaining, Norwegian cross-border trade is losing.Photo: press materials CH Strömstad (illustrative photo)
Oil and the Economy in the Background
According to strategist Dane Cekov from Sparebank 1 Markets, the price of oil plays a key role. Norway is highly dependent on this resource. The price of oil has dropped from about 75 dollars at the beginning of the year to about 60 dollars now. Adjusted for inflation, this is about one third of the level from a decade ago.
For Sweden, lower oil prices are beneficial. The Swedish economy has been struggling for some time. The Riksbank has significantly lowered interest rates, and the government has introduced major tax breaks. Growth prospects are considered better than in Norway, where development relies mainly on public spending and consumption.
For Sweden, lower oil prices are beneficial. The Swedish economy has been struggling for some time. The Riksbank has significantly lowered interest rates, and the government has introduced major tax breaks. Growth prospects are considered better than in Norway, where development relies mainly on public spending and consumption.
The expert points out that interest rate differences may continue to shrink. The Swedes have already ended rate cuts, while Norges Bank signals further reductions. This could further weaken the NOK. At the same time, the lack of prospects for a clear rise in energy prices means that a quick return to a cheaper Swedish krona is not currently in sight.
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