The prize now stands at 8 million kronor, down from the 10 million of 2011.
“The reason behind this decision is that the financial markets are really unstable and there are reasons to suspect that this turbulence will continue for a while still,” said Lars Heikensten, head of the Nobel Committee, to the TT news agency.
“Long term, we aim to raise the figure, even though we think that the Nobel Prize's value should lie in the prize itself and not the prize money,” he said.
While Heikensten admits that it was a “tough decision” to cut the prize money, he told the news agency that it's not the first time the prize sum has been altered, adding that it has been lowered and raised several times over the past few years.
In 1901, the prize was a mere 150,782 kronor, although this sum is roughly equivalent to 8 million kronor by today's standards.
The prize money, which comes from capital that Alfred Nobel donated, is not growing at a rate that will allow sure figures in the future, according to Heikensten.
“We have quite simply not had a sufficient rate of return with the money for it to have covered our costs,” he said.
Heikensten added that this year's new figure is on par with the winnings from 1901, calculated to match today's standards.