20 Kroner (Henrik Ibsen) – Norway

In 2006, Norway's currency situation was dominated by the robust performance of the Norwegian krone (NOK), heavily influenced by persistently high global oil and gas prices. As a major petroleum exporter, Norway benefited from record energy revenues, which strengthened its economic fundamentals and attracted substantial foreign capital. This created significant upward pressure on the krone, which traded at strong levels against major currencies like the US dollar and the euro throughout much of the year, contributing to a large current account surplus.

This strength presented a classic challenge for the Norges Bank, the country's central bank. While a strong krone helped curb imported inflation, it also posed a threat to the non-oil tradable sector by making Norwegian exports more expensive and imports cheaper. In response, the bank continued a well-established cycle of interest rate hikes, raising its key policy rate to 3.0% by December 2006. This tightening aimed to manage domestic economic overheating and inflationary pressures, but also had the effect of supporting the krone's value further by increasing yield differentials.

Consequently, the year was characterized by a policy balancing act. Authorities managed the substantial petroleum income through the Government Pension Fund Global (the sovereign wealth fund), insulating the domestic economy from excessive spending and "Dutch disease." The overall picture was one of a prosperous economy with a strong currency, but with ongoing vigilance required to maintain competitiveness in non-oil industries and long-term macroeconomic stability.