Icelandic króna (ISO code: ISK; Icelandic plural: krónur; króna means "crown") is the national currency of Iceland. It is commonly abbreviated as "kr." and is issued and regulated by the country's central bank. The króna is the unit of account for domestic prices, wages and most financial contracts in Iceland and is used in everyday transactions across the country.

Denominations and physical money

Physical currency in current circulation includes both coins and banknotes. Historically the króna was divided into 100 aurar, but those subunits are no longer used in day-to-day commerce. Modern coins and banknotes are minted and printed with security features and national motifs reflecting Icelandic culture and nature.

  • Common coin denominations: 1 króna, 5 krónur, 10 krónur, 50 krónur and 100 krónur.
  • Common banknote denominations: 500, 1,000, 2,000, 5,000 and 10,000 krónur.

History and development

The króna evolved from earlier Scandinavian currency systems and became Iceland’s distinct monetary unit as the country developed its own financial institutions. Over the 20th and early 21st centuries the currency has undergone changes in design, security and circulation practices. Like many small-country currencies, the króna has experienced periods of notable exchange-rate volatility and inflationary pressure tied to shifts in external trade, commodity prices and domestic banking events.

Monetary policy and issuance of banknotes and coins are managed by the central bank, which also intervenes in foreign exchange markets when necessary. At times, capital controls and other macroeconomic measures have been used to stabilise the currency and financial system; such measures have been adjusted in response to evolving economic conditions.

Uses, importance and notable points

The króna is essential for everyday commerce, tourism transactions and domestic financial contracts. Because Iceland has a relatively small, open economy with significant exposure to fishing, tourism and energy sectors, the currency can react more strongly to shocks than larger currencies. The country has not adopted the euro and retains an independent currency and monetary policy. For more general information about the currency and comparisons, see the Icelandic króna resource.