krúnunnar

Krónunnar, or the Icelandic krona, is the official currency of Iceland. Its ISO code is ISK and its common symbol is kr. The currency is issued by the Central Bank of Iceland (Seðlabanki Íslands). It is subdivided into 100 aurar, although aurar have not been in general circulation for many years.

Krónunnar was introduced in 1918, replacing the Danish krone at par following Iceland’s move to full sovereignty within the Danish kingdom. Since its introduction, it has operated as a fiat currency, with its value determined by market forces and guided by the central bank’s monetary policy. The bank uses tools such as interest rate decisions and macroprudential measures to pursue price stability and financial resilience.

The krona is used for all domestic transactions and is traded on international currency markets. The central bank maintains oversight of currency issuance, banking regulation, and monetary policy, while exchange rates are influenced by factors such as inflation, economic growth, and commodity prices, particularly those affecting tourism and fishing.

Following the 2008 financial crisis, Iceland experienced a severe depreciation of the krona and implemented temporary capital controls to stabilize the financial system. The controls were gradually lifted over the ensuing years, with most restrictions removed by the mid-2010s. Today the krona operates as a floating currency, with the central bank continuing to monitor the economy and intervene if necessary to ensure financial stability.