What Is the Czech Koruna (CZK)?
CZK is the currency abbreviation for the Czech koruna, the official legal tender for the Czech Republic. One koruna is comprised of 100 haléřů. The Czech Republic is part of the European Union (EU) and so is legally bound to adopt the common euro currency eventually, although this does not appear to be imminent.
The word koruna derives from the word for "crown", adopting similar etymology to other regional monies such as the kroner used in Scandinavian countries. As of May 2022, 1 CZK is equal to US $0.042.
- The Czech koruna (CZK) is the official currency of the Czech Republic.
- The CZK began circulation in 1993 after the break up of the Soviet Union in 1991, where it was issued at par to the previously-used Czechoslovakia koruna.
- While the Czech Republic is a member of the EU, it has not adopted the euro as its currency, and plans to do so are on hold. In fact, some believe the country may eventually exit the EU entirely.
Understanding the Czech Koruna (CZK)
The Czech koruna has been the official currency of the Czech Republic since February 8, 1993, when it replaced the Czechoslovak koruna following the dissolution of Soviet Czechoslovakia into the independent Czech and Slovak republics. The Czech koruna and the Slovak koruna (SKK) both replaced the Czechoslovak koruna at par.
The Czech Republic joined the EU in 2004 but has yet to adopt the euro (EUR) as its official currency. The nation, nonetheless, continues preparations to join the common currency but does not have an official target date to make the switch over from the koruna. Initially, the Czech Republic planned to adopt the euro as its official currency in 2012, but opposition halted that move in a 2007 vote.
The Czech National Bank, which is headquartered in Prague, currently issues and manages the country’s currency. It mints coins in 1, 2, 5, 10, 20 and 50 koruna denominations and also issues banknotes for 100, 200, 500, 1,000, 2,000 and 5,000 koruna.
The Czech Economy and the Euro
Reservations following the European debt crisis is one of the main drivers behind opposition to the Czech Republic fully joining the Eurozone and adopting the euro as its currency. While the Czech Republic is still expected to eventually adopt the euro, there has also been some talk about the country leaving the European Union entirely in recent years.
The media, as well as some political analysts, are using the terms ‘Czech-Out’ or 'Czexit' to describe a Czech version of Brexit or leaving the European Union entirely. While Czech President Miloš Zeman does not support the idea of leaving the European Union, he has said he is open to holding a referendum so citizens can again vote on the issue, mirroring the process taken by the U.K. in June 2016.
Within the EU, the Czech Republic enjoys a relatively strong economy with one of the highest Gross Domestic Product (GDP) growth rates and lowest unemployment rates, at about 2.9% in 2019, with inflation rising at around 2.8%. Unemployment rose modestly in 2020 and stood at 3.8% as of November 2020.
Exports make up about 74.4 percent of the country’s GDP, and the challenges the country’s economy face include diversifying from manufacturing, a lack of skilled workers, and an aging population.