NOK against USD reached lowest levels for 6 years as Norway unexpectedly drops key rate.
Norway’s central bank, Norges Bank, was forced to drop interest rates down 25 points to 1.25% as the lowest oil prices seen in 5 years take their toll. As an oil production dependent country, Norway has seen unemployment rise with job cuts in the oil fields and new estimates on growth subsiding from 2.1% to 1.0% for 2015.
Norway is Western Europe’s largest petroleum producer and 15th in the world. According to the US Energy Information Administration’s last figures of April 2014, Norway produced 1,902.08 thousand barrels a day, but even at that time, the estimates were down for this year for Net exports from 1,684.64 thousand barrels a day to 1,603.45 thousand barrels a day.
US Energy Information Administration data for Norway Petroleum
Without oil and gas activities, Norges Bank cut GDP down 0.75% to 1.5% for 2015.
Norges Bank said: “Growth prospects for the Norwegian economy have weakened. Activity in the petroleum industry is softening and the sharp fall in oil prices is likely to amplify this tendency. This will have spillover effects on the wider economy and unemployment may edge up ahead. At the same time, the krone has depreciated markedly, which is helping to dampen the effects on the Norwegian economy and underpin inflation.”
MT4 chart: USDNOK has dropped 5.7% across the year
MT4 chart: EURNOK has dropped 5% across the year
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