Icelandic krona

Crown
Country:	Iceland
Subdivision:	100 Aurar (Sg .: Eyrir) (2003 de facto abolished)
ISO 4217 code :	ISK
Abbreviation:	Kr, ikr
Exchange rate : (29 Mar 2020)	1  EUR  = 154.204 ISK 100 ISK = 0.64849 EUR 1  CHF  = 143.446 ISK 100 ISK = 0.69713 CHF

The Icelandic krona ( Icelandic íslensk króna , plural íslenskar krónur , abbreviation: ISK) is the currency of Iceland . Just like the currency of other northern European countries, the term comes from the crown . In 1918 the independence of Iceland from Denmark was decided and the Icelandic krona was introduced. The central bank has had the sole right to issue banknotes since 1961.

Beginnings

The name Iceland is first found on a coin from 1771, a Danish piaster . On the coin are the names of Iceland, Greenland and Faroe Islands . Iceland was then a de facto Danish colony . The Danish currency was the official currency.

The history of the independent Icelandic currency began in 1778 when Denmark allowed Iceland to use Icelandic characters on the official Danish currency. However, this currency could not prevail, also because it was not accepted in foreign trade. In 1872 Sweden, Norway and Denmark founded the Scandinavian Monetary Union , and the Danish krone that was introduced was now Icelandic currency.

National currency

Iceland, 2 Krónur (1930) commemorative coin for the millennium of the Icelandic state, Muldenhütten mint

With the independence of Iceland in 1918 and the soon following dissolution of the Scandinavian Monetary Union, the Icelandic krona was introduced.

Since 1961, the Icelandic Central Bank has had the sole right to issue banknotes in Iceland. She has had the right to issue coins since 1967. With a currency changeover on January 1, 1981, the “new krona” was introduced, with 100 “old kroner” corresponding to one new kroner.

In the course of technological change, the use of electronic banking , payments with debit or credit cards , became increasingly established . Despite this development, the currency in circulation in Iceland has increased since 2007.

Central Bank Development

After the sovereignty of Iceland in 1918, the right to issue banknotes was granted only to the state-owned bank.

In April 1961, the Central Bank of Iceland was created by a law passed by Parliament.

In 1986 the ability of the central bank to influence the interest rate for banks and savings banks was abolished. This abolition led to more competition in the financial markets and a rising interest rate.

In May 2001, a new central bank commitment came into force, stating that the primary goal of monetary policy is to maintain price stability. This top priority of maintaining price stability was confirmed in the principles of the Icelandic central bank on February 26, 2009. The bank undertakes to submit an annual report to the government on its activities, which also contributes to transparency in monetary policy.

The Icelandic Central Bank is an independent institution owned by the state but under its own administration.

Rating

The creditworthiness is determined by rating agencies . The best-known rating agencies include Moody’s , Standard & Poor’s (S&P) and Fitch Ratings . The agencies determine the creditworthiness and the probability of default of a country or an organization and thus receive a ranking. Iceland was first audited by S&P in 1986 and was given a good rating. The other agencies followed and Iceland got a very good rating. In the spring of 2008, the agencies began to downgrade and Iceland lost its certified creditworthiness.

Banknotes and coins

Banknotes

Five different banknotes of 500, 1000, 2000 and 5000 and since October 24, 2013 of 10,000 kroner are in circulation in Iceland. Each banknote bears a facsimile of the signature of the two governors of the central bank. All banknotes are watermarked by Iceland's first statesman Jón Sigurðsson (1811–1879).

Current banknotes

Face value	Motif front	Motif back	portrait	format	Issue date
500 crowns			Jón Sigurðsson	70 × 145 mm	1981
1000 crowns			Brynjólfur Sveinsson	70 × 150 mm	1984
2000 crowns			Jóhannes Sveinsson Kjarval	70 × 150 mm	1995
5000 crowns			Ragnheiður Jónsdóttir	70 × 155 mm	1986
10,000 crowns			Jónas Hallgrímsson	70 × 162 mm	2013

Coins

Value side of the 1, 10, 50 and 100 kroner coin

50 and 10 aurars, no longer in circulation, 100 aurars are 1 crown.

1 crown

This coin was put into circulation in 1981. It has a diameter of 21.5 mm. The weight is 4.5 grams. The coin is made of 75% copper and 25% nickel. Its edge is fluted. The obverse shows a giant, one of the four guardian spirits of Iceland. A cod is shown on the back . In 1989 a one-krona coin was put into circulation. It is made of nickel-plated steel and is a little lighter at 4.0 grams.

5 crowns

This coin was put into circulation in 1981. It has a diameter of 24.5 mm and its weight is 6.5 grams. The coin is made of 75% copper and 25% nickel. Their edge is also fluted. The obverse shows the four guardian spirits (dragon, griffin , bull, giant) of Iceland. Dolphins can be seen on the back .

10 crowns

This coin was put into circulation in 1984. It has a diameter of 27.5 mm and a thickness of 1.78 mm. The weight is 8.0 grams. This coin is made of 75% copper and 25% nickel. The edge of the coin is fluted. On the front are the four guardian spirits of Iceland. The back is decorated with four Kabbelane .

50 crowns

This coin was put into circulation in 1984. It has a diameter of 23 mm and a thickness of 2.6 mm. The weight is 8.25 grams. It consists of an alloy of 70% copper, 24.5% zinc and 5.5% nickel. The edge of the coin is smooth. The four guardian spirits of Iceland are also shown on the front. There is a beach crab on the back .

100 crowns

This coin was put into circulation in 1995. The 100 kroner coin is 25.5 mm in diameter and 2.25 mm in thickness. The weight is 8.5 grams. They are made of an alloy of 70% copper, 24.5% zinc and 5.5% nickel. The edge of the coin is smooth. The four guardian spirits of Iceland are depicted on the front. The back is decorated with a sea ​​hare .

Security features

The security features on means of payment have been used for centuries. The first security feature was a handwritten signature. Many other features have been added over time, for example special paper is used and a watermark of the respective portrait is incorporated. In addition, the notes are secured by a microtext, fluorescent serial numbers, a security thread, metal foil and identifying features for the blind.

Economic crisis and its effects

Exchange rate of the krone to the euro

The Northern European countries Denmark, Norway, Finland and Sweden were hit hard in the economic crises between 1987 and 1995. Since those crises, the countries affected at the time have belonged to the EU, with the exception of Norway. As a result, combating such crises requires action by the EU and not just forcing the country concerned to act. Iceland was spared from these crises from 1987 to 1995 as Denmark was least affected by this crisis.

The economic crisis in Iceland started at the beginning of the new millennium when the most important banks in Iceland went through a privatization process. The three largest banks in Iceland (Glitnir, Kaupthing and Landsbanki) did extensive business abroad. That is, Iceland's development has been financed through foreign loans.

The problem for Iceland's banks arose on September 15, 2008, when the US bank Lehman Brothers went bankrupt. This bankruptcy resulted in a loss of trust between banks, making it more difficult to obtain credit. Fortis financial institution and Dexia bank had to be bailed out, and Iceland's banks came under pressure too. Investors withdrew their assets and Glitnir became the first victim. Landsbanki came under pressure on October 6 as investors withdrew their money in a matter of hours and the bank ran out of cash. On October 7, 2008, the Icelandic government was forced to act and nationalized the two banks. Kaupthing was also placed under state control on October 9 and declared insolvent a few days later. This action by the Icelandic government was necessary to prevent national bankruptcy. The exchange rate of the Icelandic krona collapsed dramatically these days and is only recovering slowly.

Restrictions in payment transactions

For payment orders in Icelandic kroner to Iceland, the recipient needs a permit from the Icelandic Central Bank ; The approval number assigned in the course of the approval must be specified in the payment order. In addition, no Icelandic banknotes could be bought from banks abroad. In the meantime (as of 2015) this is possible again. Withdrawal of Icelandic kronor with a European debit card in Iceland from a non-Icelandic bank account is also possible. A transfer of euros to an Icelandic bank account can also be carried out.

Web links

• Current and historical banknotes of Iceland

Commons : Banknotes of Iceland  - Collection of images, videos and audio files

Commons : Coins of Iceland  - Collection of pictures, videos and audio files

Individual evidence

1. ↑ ^{a b} History of Icelandic currency (PDF; 1.3 MB) on sedlabanki.is, accessed on: April 28, 2010
2. ↑ ^{a b} Banknotes and coin , on cb.is, accessed on: August 4, 2016
3. ↑ Payment Instruments on sedlabanki.is, accessed on: April 28, 2010
4. ↑ ^{a b} Laws, rules and agreements on sedlabanki.is, accessed on: April 28, 2010
5. ↑ History on sedlabanki.is, accessed on: April 28, 2010
6. ↑ Central Bank of Iceland at cb.is, accessed on August 4, 2016
7. ↑ Valid notes in Iceland ( Memento of the original from June 24, 2006 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. at sedlabanki.is, accessed on: April 28, 2010 
8. ↑ Valid coins in circulation ( Memento of the original from March 14, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. at sedlabanki.is, accessed on: April 28, 2010 
9. ↑ Security features of banknotes on sedlabanki.is, accessed on: April 28, 2010
10. ↑ DAVID G. MAYES: Did Recent Experience of a Financial Crisis Help in Coping with the Current Financial Turmoil? The Case of the Nordic Countries. In: JCMS: Journal of Common Market Studies. 47, 2009, p. 997, doi : 10.1111 / j.1468-5965.2009.02032.x .
11. ↑ Kaupthing Bank de.wikipedia.org, accessed on: May 2, 2010
12. ↑ Welt online Wirtschaft on welt.de, date: October 7, 2008
13. ↑ State regulations at a glance ( Memento of the original dated August 4, 2016 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. at apobank.de, accessed on: August 4, 2016