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The króna (plural krónur) is the name of the currency used in Iceland. The name, meaning "crown", is related to that of other Nordic currencies (such as the Swedish krona and Norwegian krone). The ISO currency code is ISK. The Icelandic króna separated from the Danish krone after the dissolution of the Scandinavian Monetary Union at the start of World War I and Icelandic autonomy from Denmark in 1918,with full independence in 1944. Since 1961, circulation of the Icelandic króna has been controlled by Seðlabanki Íslands, the Central Bank of Iceland. In 1981, the Icelandic króna was revalued, with 100 old krónur being worth 1 new króna.
Todays (i.e., new) króna Technically, the króna is still composed of 100 aurar (singular eyrir), although in practice coins of value less than one króna have not circulated for many years. In September 2002, Davíð Oddsson, the Icelandic Prime Minister at the time, signed two regulations decreeing that all monetary amounts on invoices and financial claims should be stated and paid in whole krónur only, and that coins with a value of less than one króna should be recalled from circulation. As of 2005, the following notes and coins (issued since the 1981 revaluation) are legal tender: As of October 1st 2003, Icelandic banks no longer accept the 5, 10 and 50 aurar coins. Notes of 100 krónur or less no longer circulate, as they have been withdrawn by the central bank. As of 2006, the vast majority of banknotes in circulation are of the 500, 1000, and 5000 denominations (these generally being the only notes dispensed in ATMs, for example). 2000 krónur notes still exist, but these are unusual, and are at times referred to as "tourist money" by the local population. The overall level of technological sophistication is noteworthy in Iceland. Iceland has, for example, among the highest per capita computer usage in the world (far higher than the UK or USA). The saturation of technology in Iceland has had ramifications in their monetary system; a very large percentage of all transactions in Iceland take place through electronic forms of payment, such as debit and credit cards. It is also worth noting that the largest denomination banknote, the 5000 krónur note, represents a value somewhat less than $100 US. This, coupled with the generally extremely high prices in Iceland (a mid-range dinner for two in Iceland, without drinks or desert, can easily exceed 5000 krónur), means that banknotes are not issued in sizes conducive for larger transactions. This effect may synergize the Icelandic move towards a semi-cashless economy. Currency Issues Iceland is a fully European nation in culture and government (it has the typical socialism-flavoured capitalist government of the Nordic area), and is a signatory to many pan-European agreements, including the Schengen Treaty providing for free travel amongst most of the western European countries. Though Iceland is not a member of the European Union and does not use the Euro. As it stands, the Icelandic currency is a fully convertible but low-volume world currency, strongly managed by its central bank, with a high degree of volatility not only against the US and Canadian dollars, but also against the currencies of the other Nordic countries (Swedish krona, Norwegian krone Danish krone and the Euro). For example, during the first half of 2006, the Icelandic króna has ranged from just about fifty (50) per US$ to just about eighty (80) per US$. Tourists to Iceland will generally find little need or desire for Icelandic currency, as even taxis are prepared for electronic payment. Other world currencies are not accepted in Iceland (with the exception of the international airport at Reykjavík/Keflavík, where the US dollar and other currencies are accepted by all merchants). Old króna Coins consisted of 1, 2, 5, 10, 25, 50 aurar, 1, 2, 5, 10, and 50 krónur. Old banknotes' denominations consist of 1, 5, 10, 25, 50, 100, 500, 1,000 and 5,000 krónur. See also | |||||||||||||||||||||||||||||||||||||||||||||||||
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