Economics professor believes unprofessional politics can affect the krona – NRK Norway – Overview of news from different parts of the country

The weak Norwegian krone has caused headaches recently.

Norges Bank has raised the key interest rate as many as 14 times in just over two years to try to curb price inflation and strengthen the krone.

In recent days, the krone has been at its weakest level since December last year:

• Now one euro costs NOK 11.65
• One pound costs NOK 13.58

Knut Anton Mork, who is professor emeritus at NTNU and a macro expert at Garantum Wealth Management, believes that the government’s policy can help to explain some of the reason.

Because if few want to invest in Norway, the demand for Norwegian kroner is reduced. This contributes to a weaker krone exchange rate.

– For example, it has been very discouraging to see that, on the one hand, we get a committee and a recommendation from the Minister for Climate and Environmental Protection that we should now protect Norwegian nature. And then the finance minister comes out and says that we must have more cabin construction, he says.

– Do you think it contributes to people being unsure whether they want to invest in Norway?

– Absolutely, it simply doesn’t seem very professional, replies Mork.

Scares people away

Mork elaborates that those who buy Norwegian kroner in large quantities often do so to invest in business in Norway.

– Then they are concerned with what the conditions for establishing and operating a business in Norway are like. If there is great political uncertainty, it can scare people away, he says.

In order to strengthen the Norwegian krone, he believes the government should act more predictably. Among other things, Mork points out that many Norwegians have moved abroad recently because of increased taxes.

– You should take the signals when many people start moving out of the country because of the tax policy, he says.

Vedum blames unrest in the world

Finance Minister Trygve Slagsvold Vedum (Sp), on the other hand, believes that the government’s policy is not to blame for the weak krone exchange rate.

– That is a claim I completely disagree with, says Vedum.

He points to Sweden, which has also struggled with a weak krone, and believes there is more unrest around small currencies when there is unrest in the world.

– Norwegian state finances, Norwegian business and the Norwegian economy are rock solid, and much stronger than, for example, in Sweden. But the krone rates have followed each other quite similarly, he says.

But Mork disagrees with that:

– It is of course an explanation that suits Vedum’s political position. Yes, there are many things in the world that affect Norwegian and Swedish kroner. But if we look at it in a slightly longer perspective, the Norwegian krone has weakened significantly more.