Icelandic Króna (ISK)

About the Icelandic Króna

The Icelandic Króna (ISK) is the official currency of Iceland, written with the symbol kr and issued by the Central Bank of Iceland (Seðlabanki Íslands) in Reykjavík. Cash circulates in five banknote denominations, from 500 to 10,000 krónur, and five coins, from 1 to 100 krónur. Although the Currency Act of 1968 defines the króna as divided into 100 aurar, no aurar coins remain legal tender, and ISO 4217 records the currency with no minor unit, so amounts are settled in whole krónur.

Iceland has conducted monetary policy under a floating exchange rate since 27 March 2001, when the Government and the Central Bank replaced the króna's fluctuation band with an inflation target of 2.5 percent. The Bank steers policy through its key interest rate rather than an exchange-rate objective, but it treats foreign exchange trading as a policy instrument and intervenes when it deems action necessary to curb excessive volatility or protect financial stability. Under the Foreign Exchange Act, no. 70/2021, foreign exchange transactions and cross-border capital transfers are unrestricted unless otherwise provided for by law.

The króna descends from the Scandinavian Monetary Union of 1873, in which Denmark, Norway and Sweden adopted the gold standard, decimal coinage and the new currency names króna and eyrir; the Danish legislation was announced in Iceland the same year. Iceland's Treasury issued the first specifically Icelandic banknotes in 1886, the Sovereignty Act of 1918 brought the right to a national coinage, first exercised in 1922, and the Central Bank of Iceland, established in 1961, has issued all Icelandic currency under the Currency Act of 1968.

On 1 January 1981 Iceland carried out a currency reform that revalued the króna by a factor of 100: new banknotes and coins were issued, and older money was redeemed at one-hundredth of its face value. The reform, prepared by Act no. 35/1979, created the unit listed in ISO 4217 under the code ISK and numeric code 352. The 10-, 50- and 100-krónur banknotes launched in 1981 were later withdrawn, leaving the 500-krónur note as the smallest.

All five banknotes were designed by Kristín Þorkelsdóttir with Stephen A. Fairbairn and carry a watermark portrait of the statesman Jón Sigurðsson, while Þröstur Magnússon's coins pair Iceland's four guardian spirits with marine life, from the cod on the 1-króna piece to the lumpfish on the 100-krónur coin. The 10,000-krónur note, first circulated in 2013 and devoted to the poet and naturalist Jónas Hallgrímsson, accounted for 61.97 percent of the value of notes in circulation at the end of April 2026; the 2,000-krónur note, at 0.32 percent, is rarely seen.