Swedish krona

Swedish krona
svensk krona (Swedish)
100 kronor notes
ISO 4217 Code	SEK
User(s)	Sweden  Åland (unofficial)
Inflation	1,2 % (target 2.0 ± 1).[1]
Source	[2], July 2009
Method	CPI
Subunit
1/100	öre
Symbol	kr, :-
Nickname	spänn, bagis, pix, riksdaler
Plural	kronor
öre	öre
Coins	50 öre, 1, 5, 10 kronor
Banknotes	20, 50, 100, 500, 1000 kronor
Central bank	Sveriges Riksbank
Website	www.riksbanken.se
Printer	Tumba Bruk
Website	www.tumbabruk.se

The krona (sign: kr; code: SEK) has been the currency of Sweden since 1873. It is locally abbreviated kr. The plural form is kronor and one krona is subdivided into 100 öre (singular and plural). The currency is sometimes informally referred to as the "Swedish crown" in English (since krona literally means crown in Swedish). The Swedish krona also circulates in the Åland Islands alongside the official Finnish currency, the euro.

History

The introduction of the krona, which replaced at par the riksdaler riksmynt, was a result of the Scandinavian Monetary Union, which came into effect in 1873 and lasted until World War I. The parties to the union were the Scandinavian countries, where the name was krona in Sweden and krone in Denmark and Norway, which in English literally means crown. The three currencies were on the gold standard, with the krona/krone defined as ¹⁄₂₄₈₀ of a kilogram of pure gold.

After dissolution of the monetary union, Sweden, Denmark, and Norway all decided to keep the names of their respective and now separate currencies.

Future

The Riksbank decided on 17 February 2010, to recommend the parliament to allow it to issue a 2-krona coin and a 200-krona note, the latter a new denomination for the country. However, it did not recommend replacing the 20-krona note with a coin.^[3]

Coins

Between 1873 and 1876, coins in denominations of 1, 2, 5, 10, 25, and 50 öre and 1, 2, 10, and 20 kronor were introduced, with the 1, 2 & 5 öre in bronze, the 10, 25, 50 öre and 1 and 2 kronor in silver and the 10 & 20 kronor in gold. Gold 5 kronor were added in 1881.

Production of gold coins ceased in 1902 and was only briefly restarted in 1920 and 1925 before ceasing entirely. Due to metal shortages during World War I, iron replaced bronze between 1917 and 1919. Nickel-bronze replaced silver in the 10, 25 & 50 öre in 1920, with silver returning in 1927.

Metal shortages due to World War II again led to changes in the Swedish coinage. The nickel-bronze 10, 25 and 50 öre were again issued between 1940 and 1947. In 1942, iron again replaced bronze (until 1952) and the silver content of the other coins was reduced. In 1962, cupro-nickel replaced silver in the 10 öre, 25 öre & 50 öre coins, with the 2 kronor following suit and the 1 krona switching to cupro-nickel-clad copper in 1968 (and later being replaced entirely by cupro-nickel in 1982). 5 kronor silver coins were produced in 1954, 1955 and 1971, with designs similar to contemporary 1 and 2 kronor coins.

In 1972, a new smaller 5 kronor coin was introduced, struck in cupro-nickel-clad nickel. The current design has been produced since 1974. In 1971, the 1 and 2 öre, as well as the 2 kronor coins ceased production. The size of the 5 öre coin was reduced in 1972. ^[4] In 1984, production of the 5 and 25 öre coins came to an end, followed by that of the 10 öre in 1991. Also in 1992, aluminium-brass ("Nordic gold") 10 kronor coins were introduced along with bronze coloured 50 öre coins.

In March 2009 the government decided to cease production of the 50 öre coins, which will not be legal tender from October 2010. ^[5] The reason could include low purchasing power, higher production and distribution cost than the value and the fact that the coins cannot be used in most parking machines and vending machines.

Coins currently in circulation are:

Swedish krona coins [6][7][8][9]
Image	Value	Diameter	Thickness	Weight	Composition
	50 öre	18.75 mm	1.80 mm	3.7 g	97% copper 2.5% zinc 0.5% tin
	1 krona	25 mm	1.88 mm	7 g	Cupronickel 75% copper 25% nickel
	5 kronor	28.5 mm	2 mm	9.5 g	Outer layer (46.5%): Cupronickel (as 1kr) Inner layer (53.5%): 100% Nickel
	10 kronor	20.5 mm	2.9 mm	6.6 g	Nordic gold 89 % copper 5 % aluminium 5% zinc 1% tin
These images are to scale at 2.5 pixels per millimetre, a standard for world coins.

Of the other denominations issued in the past, all 2 kronor minted from 1876 onwards remain legal tender,^[10] although these are extremely rarely seen in circulation. In addition, all jubilee and commemorative coins minted in 1897 or later are also legal tender.^[11] The 2 kr coins contained 40% silver until 1966, which meant that they already several years ago were worth much more than 2 kr, so most have been bought and melted down by arbitrageurs, and the rest are kept by collectors. It is not legal in Sweden to melt down coins that are legal tender, which is why they still are legal.

By tradition, coins less than 1 krona do not bear the monarch's effigy, whilst those of 1 krona and above do (the current 5 kronor coin being the only exception). The royal motto of the monarch is also inscribed on many of the coins. The 5 kronor coin was designed in 1974, at a time when there were political efforts to abandon the monarchy, when there was a new young inexperienced king. The monarchy remained, but the 5 kronor was not given a portrait. Coins minted before 1974 have the same size but contain the portrait of King Gustav VI Adolf and his royal motto.

Banknotes

In 1874, notes were introduced by the Riksbank in denominations of 1, 5, 10, 50, 100 and 1000 kronor. The 1 krona was only initially issued for two years, although it reappeared between 1914 and 1920. In 1939 and 1958, 10,000 kronor notes were issued.

The 5 kronor note was discontinued in 1981, although a coin had been issued since 1972. In 1985, the 500 kronor note was introduced. With the introduction of a 10 kronor coin in 1991, production of 10 kronor notes ceased and a 20 kronor note was introduced. Production of 50 kronor notes was suspended that year but resumed in 1996. In 2006 the Riksbank introduced a new 1000 kronor note which is the first note to contain the Motion security feature developed by Crane, then called Tumba Bruk. Crane AB, located in Tumba, Sweden, prints all of the kronor banknotes.

Banknotes of the latest series are:

Current series[12]
Image		Value	Dimensions	Main Colour	Description
Obverse	Reverse				Obverse	Reverse
		20 kronor	120 × 67 mm	Bluish purple	Selma Lagerlöf	Nils Holgersson flying over Scania
		50 kronor	120 × 77 mm	Yellow	Jenny Lind	Key harp and its tonal range
		100 kronor	140 × 72 mm	Light blue	Carl von Linné	Bee pollinating a flower
		500 kronor	150 × 82 mm	Red-gray	Charles XI	Christopher Polhem
		1000 kronor	160 × 82 mm	Yellow-gray	Gustav Vasa	Olaus Magnus' picture of the Northern Peoples from 1555
These images are to scale at 0.7 pixels per millimetre. For table standards, see the banknote specification table.

Recent changes

On December 18, 2008, the Swedish Riksbank announced a proposal to phase out the 50 öre, the final öre coin, by 2010. Note, however, that the öre would remain as a subdivision unit for electronic payments.^[13] On March 25, 2009, the Riksdag formally decided to enact the law that repels 50 öre coins from circulation. Under that law the final date that payments can be made with 50 öre coins is September 30, 2010.

In 2010 the Swedish Riksbank made new proposals, this time to reintroduce the 2 kronor coin and introduce a 200 kronor bank note, in addition to replacing the current 20 kronor bank note with a coin. The proposal accompanies the modernisation and re-designing of bank notes in Sweden. Eventually, the proposal was decided upon by the Riksdag on June 2, 2010. The decision is to reintroduce the 2 kronor coin and 200 kronor bank note from January 1, 2011. The Riksdag also decided not to replace the 20 kronor bank note with a coin.

Exchange rate

Historic exchange rate against the Euro

The exchange rate of the Swedish krona against other currencies has historically been dependent on the monetary policy pursued by Sweden at the time. Since November 1992 a managed float regime has been upheld.^[14] The exchange rate has been relatively stable against the euro since its introduction 2002 (about 9-9.5 SEK per EUR), but from the second half 2008 the value of the krona has declined by around 20%, and had been oscillating between 10.4-11 SEK per EUR into the first half of 2009.. The primary reason for its declining value lies with the Riksbank, which has significantly lowered the interest rate, and has not acted to defend the exchange rate as of yet. . In the second half of 2009 and the start of 2010, the krona appreciated somewhat and is currently fluctuating between 9.5-10 SEK per EUR.^[15]

The euro

According to the 1995 accession treaty, Sweden is required to join the eurozone and therefore must convert to the euro at some point. Notwithstanding this, on 14 September 2003, a consultative Swedish referendum was held on the euro, in which 56% of voters were opposed to the adoption of the currency, out of an overall turnout of approximately 80% (according to the BBC).^[16] The Swedish government has argued that such a course of action is possible since one of the requirements for eurozone membership is a prior two-year membership of the ERM II. By simply choosing to stay outside the exchange rate mechanism, the Swedish government is provided a formal loophole avoiding the theoretical requirement of adopting the euro.

Some of Sweden's major parties continue to believe that it would be in the national interest to join, but they have all pledged to abide by the results for the time being, and have shown no interest in raising the issue again. There is an agreement among the parties not to discuss the issue before the 2010 general election. After it a debate could start leading towards a new referendum in 2012 or later, though it is likely that one would be held considerably later than that. Polls in 2005 and 2006 generally showed about 55 percent of respondents being opposed and 45 percent in favour, not counting those who are unsure (about 15%). In a poll from May 2007, 33.3% were in favour, while 53.8% were against, and 13.0% were uncertain.^[17]

In Dagens Nyheter, Fredrik Reinfeldt, the Prime Minister of Sweden stated that a new referendum on euro will not be held until support is gained from the people and all the major parties, and as such that the time is at the discretion of the Social Democrats. He added that Mona Sahlin's, the leader of the Social Democratic Party, request for deferral of new referendum until after the 2010 mandate period is to be respected.^[18]

See also

• Monetary policy of Sweden
• Swedish National Debt Office
• Table of historical exchange rates
• Scandinavian Monetary Union
• Swedish rounding
• Economy of Sweden
• Sweden and the euro

References

Further reading

• Krause, Chester L. and Clifford Mishler (1991). Standard Catalog of World Coins: 1801–1991 (18th ed. ed.). Krause Publications. ISBN 0873411501. 
• Pick, Albert (1994). Standard Catalog of World Paper Money: General Issues. Colin R. Bruce II and Neil Shafer (editors) (7th ed.). Krause Publications. ISBN 0-87341-207-9. 

External links

• Sveriges Riksbank (English)
• Swedish monetary standards in historical perspective
• Swedish coins (catalog and gallery)
• Swedish banknotes (catalog and gallery)