Swedish Krona (SEK): An Overview of the Swedish Currency

What Is the Swedish Krona (SEK)?

SEK is the currency code for the Swedish krona, the currency for Sweden. The Swedish krona is made up of 100 öre and is often presented with the symbol "kr."

The krona, which means "crown" in Swedish, has been Sweden's currency since 1873 and is also expressed by the symbol KR. It replaced the Swedish riksdaler.

As of August 2022, one SEK is worth roughly $0.10.

Key Takeaways

  • The Swedish krona is the official currency of Sweden.
  • The currency code for the krona is SEK, and the abbreviation is kr.
  • While Sweden is expected to adopt the euro at some point, there is little urgency as the Swedish population is not in favor of switching currencies.
  • The e-krona is a digital version of the krona, used via an app, and is expected to phase out the use of cash.
  • The Swedish krona replaced the riksdaler riksmynt at par in 1873, when the Scandinavian Monetary Union was formed.

Understanding the Swedish Krona (SEK)

The Swedish krona replaced the riksdaler riksmynt at par in 1873, when the Scandinavian Monetary Union was formed.

The Scandinavian Monetary Union was a fixed exchange rate system—based on the gold standard—between Sweden and Denmark. Norway joined the Union in 1875. While member countries still had their own currencies, the Union ensured exchange rate stability. This Monetary Union lasted until 1914.

Since the early 1990s, the exchange rate has been allowed to float against other currencies, with the central bank intervening when necessary to stabilize the krona's value.

The most heavily traded currency pair involving the SEK is the EUR/SEK, or the euro versus the krona.

Sweden was expected to join the eurozone, and adopt the euro, as part of the EU accession treaty of 1995. However, the majority of politicians and citizens have not been in favor of adopting the euro. Therefore, there is no urgency to give up the krona, and as of 2022, there are no plans to switch over to the euro.

Despite Sweden's relatively small economy, its well-educated and tech-savvy workforce and the fact that it is home to many multinational corporations have led many Forex observers to classify SEK as a safe haven currency.

SEK and Negative Interest Rates

In July 2009, Sweden became the first country to experiment with negative interest rates when the Swedish Central Bank briefly lowered its deposit rate for commercial banks to below zero. Initially, the SEK strengthened; pundits saw it as a positive that Sweden was taking a strong initiative to correct the economy amidst the Great Recession of 2007 to 2009. 

However, over the next few years, the Swedish economy floundered, and, in 2014, the Riksbank once again dropped the target rate to zero. In 2015, it announced a repo rate of −0.10%, which was further lowered to −0.50% in 2016, a level that was maintained through January 2019 when the rate was raised to −0.25%. By December 2019, rates once again returned to zero.

Sweden's Negative Rates

Correlations of the SEK

The SEK is strongly correlated with its Scandinavian counterparts, the Danish krone (DKK) and the Norwegian krone (NKK). The following chart shows the SEK/USD, DKK/USD, and NOK/USD on one chart; they tend to move together, though at certain times one may be stronger than the others.

SKK, DKK, NOK charts versus USD

Swedish Krona Coins and Bills

Currently, there are one, two, five, and 10 kronor (plural) coins in circulation. In terms of bills, there are 20, 50, 100, 200, 500, and 1,000 kronor bills.

The E-krona is a digital currency controlled by the Riksbank. It is exchanged through the Swish app. The E-krona hasn't officially been adopted because cash is still in use in the country. However, in the future, it's possible that cash payments will be eliminated altogether.

swedish krona

Example of Exchange Rate Conversion Using the Swedish Krona

Assume that the SEK/USD exchange rate is 0.1250. That means it costs $0.1250 to buy one krona. To find how many kronor it takes to buy one U.S. dollar, divide one by the exchange rate: 1 / 0.1250 = 8. It takes eight kronor to buy one USD. This is the rate for the USD/SEK currency pair; notice how the currencies have flipped position.

If the SEK/USD rate moves up to 0.1425, the SEK has increased in value relative to the USD, and the USD has decreased in value relative to the krona. It now costs more USD to buy one krona.

If the rate falls to 0.10, the SEK has decreased in value relative to the USD. It now costs fewer USD to buy one SEK.

Does Sweden Still Use Krona?

The Swedish krona (SEK) is the official currency of Sweden.

Which Countries Have "Krona" Currency?

Krona is the official currency of Sweden. Krona literally means "crown" in Swedish. Other countries also have currencies that are called "crown." In Norway, the currency unit is known as the krone. In the Czech Republic, the currency unit is called the koruna. In their respective languages, both of these words can be translated as "crown."

Is Swedish Krona Pegged to Another Currency?

Since autumn 1992, the exchange rate for the Swedish krona has been floating. In 1939, a few days before the start of WWII, Sweden had pegged the krona to the U.S. dollar.

How Can One Redeem Old Swedish Krona Currency?

The Riksbank (the Central Bank of Sweden) offers an application process for the redemption of all invalid Swedish banknotes, regardless of their age.

SEK is the currency code for the Swedish krona, the official currency for the country of Sweden.

Article Sources
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