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The Norwegian Krone Under Pressure Again. Poised for the Worst Year-End in Years
Lower foreign currency revenues from the oil and gas sector are weakening current demand for NOK. Fot. Adobe Stock, licencja standardowa
The Norwegian krone is clearly weakening amid falling indices on global stock markets and lower oil and gas prices. Economists point out that market sentiment has been deteriorating for several days, which is affecting the currency's performance. The situation may only change next year, when Norges Bank begins large-scale NOK purchases. Until then, the krone remains under pressure.
The first hours of trading on November 21 brought significant declines on European stock exchanges, including Oslo. This trend was preceded by drops in Asian and US markets. The weakening investor sentiment is also reflected in the value of the krone, which is losing several øre against the dollar and the euro.
The dollar costs 10.24 NOK, and the euro 11.83 NOK, marking the weakest position of the krone since August.
The dollar costs 10.24 NOK, and the euro 11.83 NOK, marking the weakest position of the krone since August.
Lower Energy Prices Affect NOK
The weakening of the krone is also being driven by lower energy prices. Brent crude costs $62 per barrel, and the European TTF gas price has dropped to its lowest level of the year—just above €30 per megawatt hour.
According to Bjørn Roger Wilhelmsen from the Norwegian fund Nordkinn Asset Management, this may be the result of talks about a possible peace agreement between Ukraine and Russia. Reduced investor risk appetite is increasing pressure on the Norwegian currency. There is also the typical decline in financial activity before the end of the year.
According to Bjørn Roger Wilhelmsen from the Norwegian fund Nordkinn Asset Management, this may be the result of talks about a possible peace agreement between Ukraine and Russia. Reduced investor risk appetite is increasing pressure on the Norwegian currency. There is also the typical decline in financial activity before the end of the year.
A temporary rebound of the krone is possible at the beginning of 2026 if central bank policy and the energy market stabilize.Photo: stock.adobe.com/standard
Norges Bank Policy and One-Off Operations
Norges Bank's actions also play a role. The institution is no longer buying the krone, depriving NOK of additional support. In addition, a one-off operation planned for 2025—transferring NOK 82 billion from the state account to the Norwegian Oil Fund (Oljefondet)—is already affecting the exchange rate.
Wilhelmsen assesses that the effect of the expansionary budget is not yet visible in the currency market. According to him, the situation may change next year when the impact of these factors becomes stronger.
Wilhelmsen assesses that the effect of the expansionary budget is not yet visible in the currency market. According to him, the situation may change next year when the impact of these factors becomes stronger.
Outlook for 2026
The economist predicts that in 2026 Norges Bank may purchase around NOK 1 billion per day, which would mark a significant shift from current policy. At the same time, lower currency purchases by the oil and gas sector, resulting from lower commodity prices, are weakening current demand for the krone.
The change between December and January may translate into a strengthening of NOK at the beginning of 2026. However, Wilhelmsen emphasizes that further declines on stock exchanges could completely change the forecasts. He notes that the krone remains more volatile than many other currencies.
The change between December and January may translate into a strengthening of NOK at the beginning of 2026. However, Wilhelmsen emphasizes that further declines on stock exchanges could completely change the forecasts. He notes that the krone remains more volatile than many other currencies.
Further declines on global stock exchanges could change forecasts for the krone.Source: pixabay.com / CC0 Public Domain
Holiday Volatility and Possible Scenarios for NOK
In the coming weeks, markets will be watching both energy price fluctuations and central bank decisions, which could determine the direction of NOK exchange rate changes. The upcoming holiday period, characterized by lower liquidity, may further increase the amplitude of fluctuations.
In such an environment, any signs of improvement in global sentiment could trigger a rapid reaction in the currency market. At the same time, some investors are already analyzing opportunities related to a potential strengthening of the krone in the first months of the coming year.
In such an environment, any signs of improvement in global sentiment could trigger a rapid reaction in the currency market. At the same time, some investors are already analyzing opportunities related to a potential strengthening of the krone in the first months of the coming year.
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