The Norwegian krone (NOK) is considered to be an exotic currency in the Forex market. Since Norway is an important exporter of oil, it is also closely tied to oil prices. Norway is the world’s forty-second largest economy (CIA.gov).
Trade Surplus or a Trade Deficit?
Norway runs a trade surplus of $60.23 billion, giving the country a ranking of 5 out of the 190 countries tracked by the CIA in The World Factbook(CIA.gov).
What Does Your Economy Export?
Norway exports petroleum and petroleum products, machinery, equipment, metals, chemicals, ships, and fish. According to the World Trade Organization (WTO) ( stat.wto.org), Norway exports $120.9 billion in goods and merchandise compared to only $38 billion in commercial services. The WTO breaks down those exports as follows:
Goods and Merchandise
- Agricultural products: 6.6 percent
- Fuels and mining products: 68.0 percent
- Manufactures: 19.6 percent
Commercial Services
- Transportation: 41.8 percent
- Travel: 10.7 percent
- Other commercial services: 47.6 percent
To Whom Does Your Economy Export?
The WTO ranks the following countries as the top destinations for exports from Norway:
- European Union: 80.4 percent
- United States: 4.8 percent
- Canada: 2.1 percent
- China: 2.0 percent
- South Korea: 1.9 percent
What Does Your Economy Import?
Norway imports machinery and equipment, chemicals, metals, and foodstuffs. According to the WTO, the country imports $69.3 billion in goods and merchandise compared to only $37.6 billion in commercial services. The WTO breaks down those imports as follows:
Goods and Merchandise
- Agricultural products: 9.5 percent
- Fuels and mining products: 10.3 percent
- Manufactures: 75.8 percent
Commercial Services
- Transportation: 26.3 percent
- Travel: 32.6 percent
- Other commercial services: 41.1 percent
From Whom Does Your Economy Import?
The WTO ranks the following countries as the top sources of imports to Norway:
- European Union: 66.3 percent
- China: 7.8 percent
- United States: 6.2 percent
- Japan: 2.5 percent
- Canada: 2.2 percent
Do You Have an Attractive Government Debt Market?
Norway currently has a Moody’s rating of Aaa. It received this la test rating on September 30, 1997. This most recent rating was an upgrade from the Aa1 rating that the country had held previously. This is a positive sign for the country’s government debt market (www.moodys.com).
Do You Have an Attractive Equities Market?
Norway has an attractive equities market, but it is not very large. It is the thirty-second largest equities market in the world, with a total market value of $227.2 billion (CIA.gov).
Central Bank Mandate
The Central Bank of Norway’s (Norges Bank) activities are regulated by the Norges Bank Act of 1985. The act states that the bank shall be an executive and advisory body for monetary, credit, and foreign exchange policy. The bank shall issue banknotes and coins, promote an efficient payment system domestically as well as vis-a-vis other countries, and monitor developments in the money, credit, and foreign exchange markets. The act authorizes the bank to implement measures customarily or ordinarily taken by a central bank. The Central Bank of Norway has foreign currency reserves of $39,073 million and no gold deposits (www.imf.org).
Government Intervention in Forex
The Norwegian government is not known as an aggressive currency manipulator.
Important Economic Announcements
When you are watching the economic announcements coming out of Norway, make sure that you keep your eye on the following:
- Interest rates
- Employment
- Inflation
- Gross domestic product (GDP)
- Trade balance
Are You a Safe-Haven Currency?
No, the Norwegian krone is not considered to be a safe-haven currency.
How Can I Trade You?
You can trade the Norwegian krone using any of the following:
- Spot Forex
- Forex futures
- Spot Forex options
- Exchange-traded Forex options
