What is the 'Icelandic Króna - ISK'

Icelandic króna - ISK is the currency of Iceland. The króna is divided into 100 aurar and is often presented with the symbol kr. This currency has the nickname "Icelandic crown" in the financial markets because the English translation of  króna is "crown.” In addition, the word is related to the Latin word corona, meaning crown.

As of mid-2018, one Icelandic króna equaled a little less than one U.S. cent. The Icelandic króna lost significant value versus the U.S. dollar in 2008, at the height of the Icelandic financial crisis, the year all three privately owned commercial banks in Iceland defaulted. International trading of króna temporarily halted that year. The króna  generally stabilized versus the dollar from 2009 to early 2015, then rose moderately in value from mid-2015 to mid-2018.

BREAKING DOWN 'Icelandic Króna - ISK'

Icelandic króna - ISK debuted in 1922 in coin form, followed by notes in 1929. The first króna traded until 1981, after which the government floated a second króna, which remains in use today. Due to inflation, the general public and The Central Bank of Iceland used whole krónur, the plural of króna, since 2002.

The Central Bank of Iceland pegged the króna to the Danish krone in the early 1920s, then to the British pound from 1925 to 1939. It then pegged the króna to the U.S. dollar until 1949, after which the króna floated freely.

Krónur are issued in notes of 1,000, 5,000 and even 10,000.

The króna is traded on global exchanges, although in fairly low volumes due to limited issuance. Traders flocked to króna leading up to the banking crisis, betting on its relative demise. In 2016 and 2017, however, traders bet on the relative strength of the króna versus the euro, pound and dollar, driven by the nation’s economic growth, strong tourism industry, relatively high rates of interest and the lifting of capital regulations in 2017 that initiated during the financial crisis.

Influences on Icelandic Króna - ISK

Iceland is a small country with a GDP of about $23 billion, although GDP per capita is among the highest in the world. The economy tends to vacillate, as does the króna, which has a history of several notable devaluations, the most recent in 2008, when the country accepted loans from the International Monetary Fund during the crisis.

Iceland’s economy depends more than most on tourism, which is the country’s main export and a major source of employment, as well as the global markets for fishing and aluminum. The country also exports electric power, due to its abundant geothermal resources.

  1. Auroracoin

    Auroracoin is a cryptocurrency launched in Iceland after the ...
  2. Silent Bank Run

    A silent bank run is a situation in which a bank's depositors ...
  3. Stockholm Stock Exchange (STO) ...

    The Stockholm Stock Exchange is the main securities exchange ...
  4. Key Currency

    A key currency used is money issued by stable, developed country ...
  5. National Currency

    A national currency is a legal tender issued by a central bank ...
  6. Nasdaq National Market Securities ...

    The NASDAQ National - Nasdaq NM is the market, comprising more ...
Related Articles
  1. Tech

    What Is Auroracoin?

    Auroracoin is Iceland's proposed national cryptocurrency.
  2. Personal Finance

    The World's Top Emerging Airlines

    Investopedia explores the top emerging airlines in the world and their prospects for growth.
  3. Retirement

    10 Best Countries for New Retirees

    Natixis Global Asset Management recently released its 2015 Global Retirement Index, and you may or may not be surprised that the U.S. barely cracked the top 20 at number 19. Of the top 10, eight ...
  4. Small Business

    U.S. Lags in Share of Women on Company Boards (GM, HPQ)

    The U.S. lags behind other countries when it comes to the share of women on large companies' boards, according to data compiled by the OECD.
  5. Insights

    Google Is Now Richer Than Over 100 Countries

    Find out where Google ranks among the wealthiest nations of the world and which countries report GDP figures below the tech giant's annual revenue.
  6. Trading

    Why the Euro Failed to Become the World's Reserve Currency

    Examine the current state of the U.S. dollar as the world's reserve currency; learn the major reasons why the euro has failed to replace it in that capacity.
  7. Insights

    World Bank Data For Dummies

    Developing countries can't always afford to track the data crucial to setting the right economic policies and programs. That's where the World Bank steps in.
  8. Trading

    Currency fluctuations: How they effect the economy

    Currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for most major economies. Read on for what effects these changes can have.
  9. Insights

    10 Most Indebted Nations

    There are many different ways to measure debt. See how the top 10 indebted nations change, depending on how you look at it.
  1. How are international exchange rates set?

    Knowing the value of your home currency in relation to different foreign currencies helps investors to analyze investments ... Read Answer >>
  2. What is foreign exchange?

    Foreign exchange is the conversion of a country's currency into another. In a free economy, a country's currency is valued ... Read Answer >>
  3. Is Bitcoin legal in the US?

    Learn about the legality of Bitcoin as a form of payment in the United States, as well as how it is produced and concerns ... Read Answer >>
  4. Which countries are most productive in terms of GDP?

    Countries around the world constantly compete with one another to be the most innovative and productive. Read to see which ... Read Answer >>
  5. What country spends the most on education?

    Learn about the amounts that various developed nations spend on educating their young people compared to education spending ... Read Answer >>
Trading Center