Faroese króna
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| ISO 4217 Code | DKK |
| User(s) | Faroe Islands |
| Inflation | 5.1% |
| Source | The World Factbook, 1999 |
| Pegged with | Danish krone at par |
| Subunit | |
| 1/100 | oyra |
| Symbol | kr |
| Plural | krónur |
| oyra | oyrur |
| Coins | None |
| Banknotes | 50, 100, 200, 500, 1000 krónur |
| Central bank | Danmarks Nationalbank |
| Website | www.nationalbanken.dk |
The Faroese króna (plur: krónur) is the currency of the Faroe Islands. It is issued by the Danish National Bank. It is not an independent currency, but in fact standard Danish bank notes printed with specific Faroese motifs, mostly animals and natural scenery. Between 2001 and 2005, a new bank note series with new security features was introduced to replace older notes. The islands use Danish coins like Denmark and Greenland.
Since the Faroese króna is not an independent currency, it does not have an ISO 4217 currency code. The ISO 4217 code for the Danish krone is DKK.
Danish kroner are exchanged to Faroese krónur and vice versa by the National Bank of Denmark free of charge. While Danish bank notes are not formally legal tender in the Faroes, they are accepted there in most situations. In Denmark proper, existence of the Faroese króna is poorly known, particularly the fact that it has the same value as the Danish krone and can be exchanged by any Danish bank without charge. Persons traveling from the Faroes to Denmark are often advised to exchange their cash prior to embarking in order to prevent potential complications arising from this situation.
Contents |
[edit] History
When German forces occupied Denmark on 9 April 1940 the Danish krone was used in the Faroes. But all exchange between the Faroes and Denmark halted as a result of occupation leaving one currency to develop in two markets independently of each other.
On 31 May 1940 a special Faroese currency was legally introduced. The currency consisted of Danish banknotes with a special stamp. These notes replaced unstamped Danish at par.[1] Due to the complete separation between the Faroese and the Danish marked and the total lack of any Faroese authority intervening in matters of currency the Exchange rate regime in use at this time can be interpreted as Floating exchange rate.
From 14 October 1940 new banknotes were printed "on behalf of the National Bank of Denmark"[2]. The value of these new banknotes was the same as those already in use.
On 18 December 1940 a Currency Central was established in order to monitor foreign trade and to secure the solvency of the Faroes. Currency Central was headed by a Board of 9, the judge, who was chairman, one representative of Faroe Fish Export, one representative of the Faroese Merchants' Union, one representative of the bank Føroya Banki, one representative of the savings bank Føroya Sparikassi and four representatives of the Løgting[3].
On 18 December 1940 the Faroese Króna was fixed to the pound sterling at a rate of 22,4 krónur to a pound[4]. This constitutes a change of Exchange rate regime from Floating exchange rate to Fixed exchange rate. This rate was officially accepted by the British government in a treaty titled "Agreement between His Britannic Majesty's Government and the Administration of the Faroe Islands, for Regulating the Financial Relations between the United Kingdom and the Faroe Islands" which came into force on 27 March 1941.[5]. At the same time the Board of the Currency Central was reorganized to only three members, one representative of the British Government, one representative of the State (referring to the State of Denmark, meaning the County of Faroe), and one representative of the Løgting or the parliamentary National Board[6].
From 12 April 1949 the Faroese króna was separated from the pound sterling and fixed to the Danish krone at a rate of 1 króna = 1 krone.[7] This constitutes a change in the Exchange rate regime from a Fixed exchange rate to the pound sterling to being fixed to the Danish krone. This arrangement is still in power.
Although Faroese banknotes were issued "on behalf of the National Bank of Denmark" the National Bank of Denmark does not claim any rights to any Faroese banknotes issued prior to 1951.[8]
[edit] References
- ^ Færöernes Kundgörelsessamling 1940, p. 7 - Gazette of the Faroes, Danish language.
- ^ Færöernes Kundgörelsessamling 1940, p. 40 - Gazette of the Faroes, Danish language.
- ^ Færöernes Kundgörelsessamling 1940, p. 62-64 - Gazette of the Faroes, Danish language.
- ^ Færöernes Kundgörelsessamling 1940, p. 62-64 - Gazette of the Faroes, Danish language.
- ^ Færöernes Kundgörelsessamling 1941, p. 19-21 - Gazette of the Faroes, English and Danish language.
- ^ Færöernes Kundgörelsessamling 1941, p. 22 - Gazette of the Faroes, Danish language.
- ^ Lov nr. 248 frá 12. april 1949 om pengesedler m.v. på Færøerne - Act about Banknotes and more on the Faroes. Danish language.
- ^ The previous Faroese banknote series - The National Bank of Denmark.
[edit] See also
[edit] External links
- The new Faroese banknote series - National Bank of Denmark.
- Landsbank.fo - National Bank of the Faroes
- Faroe Islands Banknotes
- Information Memorandum 2005, 6.2 Currency, p. 23.
| Currencies named crowns or similar | |
|---|---|
| Current | Czech koruna · Danish krone · Estonian kroon · Faroese króna · Icelandic króna · Norwegian krone · Slovak koruna · Swedish krona |
| Defunct | Austro-Hungarian krone · Czechoslovak koruna · Hungarian korona · Yugoslav krone |
| As a denomination | British crown |
