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Private Economy, Kroner Course | The Norwegian krone plunges: This will cost you

The weaker krone provides, among other things, more expensive holidays and other purchases abroad. Check what you lose with our calculator.

The krone has depreciated against the vast majority of currencies in recent years. This fall, the Norwegian krone has reached new bottom prices against the dollar and euro.

All purchases abroad thus become more expensive.

Three types of losses

We have divided the losses into three main areas:

  • Holidays abroad
  • Buy abroad
  • Indirect cost from imported goods

For holidays abroad, the currency changes will be reflected immediately. For example, vacationing in the United States has become considerably more expensive in recent years. Turkey, on the other hand, may have become cheaper (depending on the date you are measuring).

The same applies to all other purchases abroad such as online purchases, or bottle trips to Sweden. If you buy something online from China, it is the development of the yuan exchange rate that is crucial.

Imported goods

We buy goods that come from abroad for large amounts. But the effect of currency appreciation on imported goods is much more difficult to calculate. The effect of this doesn't even come with it. Often it will take a long time for it to arrive.

Initially, one would think that the whole effect comes over time, but it is not that simple. The competitive situation will determine the percentage of exchange rate change that will increase prices. For a country that has experienced stronger price developments, it may be difficult to raise prices when there are other countries that have not experienced such strong development.

Many companies, for example, also have currency hedging for a year, so it will take a long time for this to happen. For example, it is common for car importers to hedge currency for one year.

Power, for example, can also be a little more expensive because it purchases electricity from abroad in euros. But the effect is difficult to quantify.

The conclusion is that it is difficult to make a good estimate of how large a loss will be on currency increases. In the calculator below you can see how the effect will be by using different assumptions.

Example of what you can lose

Exchange rates are pre-posted with rates starting on 1.7.19, and November 8th. This example we can say will apply in 2020, assuming that today's courses remain at the current level.

Here, the total purchase abroad is NOK 25,000, and holiday abroad is NOK 40,000. For imported goods, the total value is NOK 85,000, with the effect being 50 per cent. A total of 150,000 kroner.

Based on these assumptions, this will result in a loss of NOK 4,300.

Had we chosen a different date and older as a starting point, the loss would have been greater. For example, the exchange rate of the euro has risen by more than 40 per cent compared to the bottom point some years ago.

Buy abroad
Euro5 000201
Swedish kroner10 000321
Dollar5 000328
Chinese yuan5 000224
Sum25 0001 074
Holidays abroad
Euro30 0001 209
British Pounds10 000797
Sum40 0002 006
Indirect from import (50% power)
Euro40 000806
Swedish kroner10 000161
Danish kroner5 00097
Dollar10 000328
Chinese yuan10 000224
British Pounds5 000199
Other countries5 000115
Sum85 0001 930
Totally150 0005 010

Calculator for calculating losses

It is divided into the three main areas mentioned above

For imported goods, you can choose what percentage of the currency difference to include. A value of 50 per cent is pre-entered.

You can choose on which day to enter the exchange date for the exchange rates. Today's exchange rate is from November 8.

Here you will find all the exchange rates.

The most important currencies for purchases and holidays are included. The rest can be entered in the line for the import-weighted krone index, which represents the average.

The calculator is developed by

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