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Here is Norway’s new 1,000-krone note

A new 1,000-krone bill was released into circulation on Thursday.

Published: 14 November 2019 13:18 CET

Here is Norway’s new 1,000-krone note

The new 1,000-krone note. Photo: Norges Bank

The new high-denomination note is the latest in the series of Norwegian banknotes to get an update and follows the nautical theme of designs issued since 2017.

Thursday’s release means that the new banknote series is now complete, central bank Norges Bank said in a press statement.

All Norwegian banknotes are now characterized by the nautical motif, and by displaying pictures rather than portraits.

“The new 1000-krone banknote will be circulated on November 14th, 2019. The old version can still be used for one year from this date. Norges Bank is then obliged to exchange the old banknote for at least the next ten years,” Norges Bank director of cash payments Leif Veggum said in the press statement.

Usage of the high-value 1000-krone note has dwindled in recent years, partly because of its limited use in ATMs, according to Norges Bank.

But it remains an important part of Norway’s currency system.

“It should be possible to make payments without having to use unnecessary banknotes, or to receive too bills as change. Our assessment is that five denominations, with 50 as the lowest and 1,000 as the highest is the most appropriate,” Veggum said.

The maritime designs were chosen after a competition held in 2014, are inspired by the concepts “the sea brings us out” and “the sea gives us food.

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Technological advances making it easier to counterfeit notes are behind the central bank’s decision to release the new designs.

“As a central bank it is our responsibility to ensure that Norwegian banknotes always have sufficient security levels. That’s why we have developed a new series of notes that are safer than ever before,” Norges Bank governor Øystein Olsen told E24 in 2017.

The new security elements on the notes take the form of both visible filaments in the notes and invisible marks.

The development and launch of the new notes cost the central bank a total of 70 million kroner plus production costs, E24 previously reported.

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What Norway’s latest interest rate increase mean for your finances

High inflation, high economic activity, high employment levels, and a weak krone were behind Norges Bank, the central bank of Norway, raising the key policy rate.

Analysts predict the bank will continue raising the key policy rate to between 3.5 and 3.75 percent by this autumn.

While the numbers may not seem massive, and the topic of interest rates may seem dry, these decisions can directly impact your finances.

The most obvious and immediate impact of the rate increase means more expensive loan and remortgage repayments if you aren’t on a fixed-rate deal.

A mortgage of around two million kroner can now be considered 2,900 kroner a month more expensive than a year prior. This will be noticeable in the payments you make in the coming months, as it usually takes the banks in Norway six to eight weeks to introduce higher rates.

Around 95 percent of Norwegians have floating interest rates, meaning many will feel the squeeze of interest rates increasing in the coming months. The next hike from the central bank is likely to be announced in May.

Following the hikes, many should expect a mortgage interest rate of around 4.8 percent by early next year. Meanwhile, Carsten Henrik Pihl from the Homeowners Association told the Norwegian newswire NTB that a mortgage rate of 4.5 percent could be considered a good deal.

Mortgage rates are expected to remain at the peak of almost five percent for around the next two years, Nordea’s chief economist Kjetil Olsen told business news publication E24.

Higher interest rates eat into disposable income. This means people will spend less than they would otherwise generally do and reduce the demand for homes, cooling the property market.

“Interest expenses increase and eat away at disposable income so that it reduces purchasing power. This, in turn, reduces both housing demand and general consumption,” Nejra Macic from the Forecast Centre told E24.

Lower demand for housing may result in property prices dipping or slowing down, which is good news for buyers who have trouble keeping up with soaring prices, but news for those who may have bought recently or plan on a quick sale.

On a more macro-level, lower consumption may slow inflation, which Norges Bank has always intended to achieve with interest rate raises.

Those who are young or single are most likely to feel the squeeze of the latest interest rate increases as they tend to have a higher ratio of debt to income, Macic explained to E24. The same could be true for those living in Oslo, as traditionally, the capital has the highest debt-to-income ratio in Norway.

Additionally, the interest rates will also impact how much value you get for your kroner when you go abroad. Several factors are currently contributing to the krone being at its weakest level for several years.

Among the factors is interest rates in Norway being lower than in the Eurozone and the US. This makes the krone less attractive than the euro and the dollar for investors.

Even with the forecasted rises, interest rates are unlikely to be higher in Norway than in other countries. This has led to some analysts predicting that the krone would likely remain weak as interest rates would have to be hiked higher to boost the krone.

“I do not believe that Norges Bank, through the interest rate differential, will be able to secure a stronger krone exchange rate over time,” Kjetil Martinsen, the chief economist for Swedbank, told Finansavisen.

A weaker krone means you get less value for your money abroad, making foreign trips and holidays more expensive. A weak krone also makes imports more expensive, meaning that goods that aren’t produced in Norway become more expensive.

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