The rise of the Norwegian krone as a safe-haven currency during Europe’s debt crisis has hurt an equity exchange traded fund that invests in the country.
Norway said recently it would takes steps to weaken the krone. The currency’s rise threatens exporters while the widest budget surplus of any triple-A-rated nation draws investors seeking refuge from debt crises in the U.S. and Europe, Bloomberg reported.
The Global X FTSE Norway 30 ETF (NYSEArca: NORW) tracks an index of Norwegian stocks.
Norway is about to undergo a fiscal policy makeover as Finance Minister Sigbjoerm Johnsen announced he intends to lower the pressure being placed on the nation’s currency, according to the report.
The krone’s strength is “probably largely due to the uncertainty we see and, of course, Norway’s solid economy attracting capital,” Johnsen said. “And that underlines how important it is for us, trough our fiscal policy, to do what we can to reduce the pressure on interest rates, and thereby also on the krone.”
Global X FTSE Norway 30 ETF - (click chart to enlarge)
Tisha Guerrero contributed to this article.