gjaldmiðils

Gjaldmiðill is the unit of value used as money in an economy. It serves as a medium of exchange, a unit of account, and a store of value. It exists in physical form as coins and banknotes and in digital form as electronic money and transfers. The term covers the country’s own currency as well as any system of money recognized for settlement within the economy. It is defined and regulated by law and monetary policy.

In Iceland, the official gjaldmiðill is the Icelandic króna, abbreviated ISK. The Seðlabanki Íslands, the Central Bank of Iceland, issues banknotes and coins and conducts monetary policy, including setting interest rates and managing the exchange rate to pursue price stability and financial stability.

The króna is subdivided into 100 aurar, though aurar are rarely used in daily transactions; prices are typically quoted in whole ISK. Coins and banknotes come in various denominations and are issued by the central bank.

The gjaldmiðill functions as an instrument of macroeconomic policy and a means of payment. Its value is influenced by monetary policy, inflation, exchange rates, and market expectations. The Icelandic rate regime and the floating exchange rate affect imports, exports, tourism, and capital flows.

The term gjaldmiðill is used in economics, law, and finance to denote the system of money used in a country. In Icelandic contexts, it refers primarily to the ISK and its regulation by the central bank. See also Seðlabanki Íslands and the Icelandic króna.