20 Kroner (Norwegian Mapping Authority) – Norway

In 2023, Norway's currency, the krone (NOK), experienced significant depreciation against major currencies like the US dollar and the euro, reaching historically weak levels. This trend, which began in 2022, was primarily driven by a widening interest rate differential. While central banks like the European Central Bank and the Federal Reserve aggressively raised rates to combat inflation, Norges Bank adopted a more cautious and gradual approach. This made krone-denominated assets less attractive to international investors, leading to capital outflows and downward pressure on the currency.

The weak krone presented a complex economic picture for Norway. On one hand, it provided a substantial boost to the country's crucial petroleum sector, as oil and gas exports became more profitable in krone terms, further filling the state's sovereign wealth fund. On the other hand, it increased the cost of imports, contributing to persistent domestic inflation and a higher cost of living for Norwegian households. This created a policy dilemma for Norges Bank, which had to balance fighting inflation with the risk of harming an economy sensitive to higher borrowing costs.

By the end of 2023, the krone showed some signs of stabilization but remained weak. Norges Bank continued its tightening cycle, implementing further rate hikes with a clear signal that rates would stay "high for longer." The bank explicitly cited the weak currency as a contributing factor to inflation, making its strength a consideration in monetary policy. Ultimately, the year highlighted Norway's vulnerability to global capital flows and the challenging trade-offs between a weak currency's export benefits and its domestic inflationary consequences.