The krone is the official currency of Norway. It is a decimal currency subdivided into 100 ore. The name of the currency comes from the Norwegian word for crown. Use of the Krone began in 1875 when it was introduced as a multi-national currency for Norway, Sweden and Denmark through the newly established Scandinavian Monetary Union. The krone in Norway replaced the daler and skilling. The krone was setup on a gold standard, but the currency was rarely allowed to be traded for actual gold by the public. The Scandinavian Monetary Union lasted until 1914, but at its end, each participating country chose to keep the same name for each of their new currencies.
The monetary authority in Norway is Norges Bank. It was actually founded before the Scandinavian Monetary Union in 1816, and it again played a major role in the country’s economy in 1914. Norges Bank helped to maintain the value of the Norwegian krone by pegging it to the gold standard and allowing it to float off and on until 1940. At the time, the Norwegian government went into exile and maintained the bank and the currency from a temporary London headquarters. Norway’s gold reserves were safely removed and held in various locations around the world. After World War II, the exchange of the Norwegian krone, like most of the world’s currencies, was governed under the Bretton Woods System. Under the Bretton Woods System, the value of the krone was pegged to the pound sterling and U.S. dollar but was allowed a one percent fluctuation range.
In the 1970s, 1980s and 1990s, the value of the krone slowly dropped but was temporarily brought under control by pegging it to the European Currency Unit. The peg was removed two years later, and the krone has floated since that time, although it has been maintained by strict guidelines. The controlled floating exchange of the krone fluctuates against the euro, U.S. dollar and Australia dollar. Value of the krone is linked to the price of oil. The value of the krone was highest in 2002, when the export price of Norwegian oil was also at its highest.
The first krone coins were introduced in 1875, and the first banknotes followed in 1877. Several reissues have taken place since. Krone coins are currently minted in the following denominations: 50 ore, 1 krone, 5 kronor, 10 kronor and 20 kronor. Banknotes are currently issued in denominations of 50, 100, 200, 500 and 1000 kronor.