Krone and ruble tumble together with oil price
Low oil price is turning into nightmares for both Norwegian and Russian economies. Worst for Russia that rolls into its second year of recession. For Norway, private consumption is expected to go down as uncertainties and unemployment rate climb.
An oil price of $37 per barrel is way under what both countries national budgets for 2016 are based on.
Things don’t look much better going forward. Norway’s investments will go down, especially in oil related businesses. Statoil this week announced voluntary redundancy packages to all employees. Mainland production fells and economic growth slows down.
This week, the Russian ruble is trading at its lowest since black Monday in August. 71 to the dollar and 78 to the euro are near all time low. If oil price stays on $37 or continues to fall, Russia’s economic outlook for 2016 looks grey-dark.
With $35 a barrel, Russia’s economy is expected to shrink by 2-3 percent, with unemployment up and wages down as a result. Russia’s current 2016 budget plans relies on $50 a barrel.
One Norwegian krone is Friday traded at 8.76 to the dollar and 9,48 to the euro. And for Norwegians, a Swedish krone is today more worth than the Norwegian, traded at 1,04.