Danish krone

Danish krone dansk krone (Danish) donsk króna (Faroese) danskinut koruuni (Kalaallisut)
ISO 4217 Code	DKK
User(s)	Denmark,  Greenland,  Faroe Islands 1
Inflation	1.5% (Denmark only)
Source	The World Factbook, 2007 est.
ERM
Since	13 March 1979
€ =	kr 7.46038
Band	2.25%
Subunit
1/100	øre
Symbol	kr
Plural	kroner
øre	øre
Coins	50 øre, 1, 2, 5, 10, 20 kroner
Banknotes	50, 100, 200, 500, 1000 kroner
Central bank	Danmarks Nationalbank
Website	www.nationalbanken.dk
Special banknotes are issued for use on the Faroe Islands – see Faroese króna

The krone (sign: kr; code: DKK) is the currency of Denmark, including the autonomous provinces of Greenland and the Faroe Islands. The krone is pegged to the euro via the European Union's exchange rate mechanism. The plural form is "kroner" and one krone is divided into 100 øre, the singular form being the same as the plural. The ISO 4217 code is DKK; the domestic abbreviation is "kr.". Occasionally, the variants DKR or Dkr are seen, but these are not official.

History

Until the late 18th century, the krone was a denomination equal to 8 mark.[1] A new krone was introduced as the currency of Denmark in 1873. It replaced the Danish rigsdaler at a rate of 2 kroner = 1 rigsdaler. The krone was introduced as a result of the Scandinavian Monetary Union, which lasted until World War I. The initial parties to the monetary union were the Scandinavian countries of Sweden and Denmark, with Norway joining two years later. This placed the krone on the gold standard at a rate of 2480 kroner = 1 kilogram fine gold.

The name of the common currency was "krone" in Denmark and Norway (see Norwegian krone), and "krona" in Sweden (both names mean "crown" in English). After the dissolution of the monetary union, Denmark, Norway and Sweden all decided not to change the names of the now separate currencies.

The Scandinavian Monetary Union came to end in 1914 when the gold standard was abandoned. Denmark returned to the gold standard in 1924 but left it permanently in 1931. Between 1940 and 1945, the krone was tied to the German Reichsmark. Following the end of the German occupation, a rate of 24 krone to the British pound was introduced, reduced to 19.34 (4.8 krone = 1 US dollar) in August the same year. Within the Bretton Woods System, Denmark devalued its currency with the pound in 1949 to a rate of 6.91 to the dollar. A further devaluation in 1967 resulted in rates of 7.5 krone = 1 dollar and 18 krone = 1 pound.

Faroe Islands and Greenland

In the Faroe Islands, Danish coins are used but the islands use distinct banknotes (see Faroese króna). During the British occupation of the islands in World War II, a shortage of small change occurred, which prompted the British to produce copies of Danish 1 øre, 2 øre, 5 øre, 10 øre and 25 øre coins for use on the Faroe Islands, the first three in bronze, the latter two in cupronickel. This issue is identical to pre-war Danish coinage but carries the year 1942 and lacks the tiny heart identifying coins as products of the Royal Danish Mint in Copenhagen. No similar coins were issued this year in Denmark proper, as Denmark shifted to zinc issues this year. Banknotes in circulation in the Faroes were overstamped by the amt administration invalidating the notes outside of the Faroes.

The modern Faroese banknotes were introduced in the 1950s. Although a common misconception, the Faroese króna is not an independent currency, but a separate set of DKK banknotes with a different design.

In Greenland, the colonial administration issued distinct banknotes between 1803 and 1968, together with coins between 1926 and 1964 (see Greenland rigsdaler and Greenland krone). In 2006, the governments of Denmark and the Greenland home rule authority announced that by 2008, distinct Greenlandic banknotes will be introduced. These will, like in the Faroes, have the status of a cosmetic variation of DKK banknotes.^[1]

Due to this status, ordinary Danish banknotes are legal tender in both Greenland and the Faroe Islands, and Danish banks exchange notes issued for use in these regions 1:1 for ordinary Danish notes.

Relationship to the euro

Further information: Denmark and the euro, Opt-outs in the European Union, and Danish European Union opt-outs referendum

Denmark negotiated special "opt-outs" of the Maastricht Treaty that allowed the country to preserve the krone while most other members of the European Union adopted the euro in 1999. A referendum on the currency issue held in 2000 rejected the proposed adoption of the euro. The Liberal-Conservative government of Anders Fogh Rasmussen planned another referendum on the issue in 2004, but these plans were dropped when polls showed decreasing support for the euro. The government is still committed to converting Denmark's currency to the euro eventually.

The krone is pegged to the euro via the ERM II, the European Union's exchange rate mechanism. Before the introduction of the euro, the krone was linked to the German mark, the intention being to keep the krone stable.

Coins

1941 aluminium 2 øre coin

The coins of the krone currency are issued by the Danish National Bank. When the currency was introduced in the 1870s, coins were minted in denominations of 1, 2, 5, 10 and 25 øre and 1, 2, 10 and 20 kroner. The 1, 2 and 5 øre were minted in bronze, the 10 and 25 øre, 1 and 2 kroner in silver, and the 10 and 20 kroner in gold. Production of gold coins ceased in 1917, followed by silver coins in 1919. Iron substituted bronze in 1918 and 1919. In 1920, cupro-nickel 10 and 25 øre were introduced, followed, in 1924, by aluminium-bronze ½, 1 and 2 krone coins.

In 1941, zinc 1, 10 and 25 øre and aluminium 2 and 5 øre coins were introduced, with zinc 2 and 5 øre following the next year. The ½ and 2 kroner denominations were withdrawn. Cupro-nickel 10 and 25 øre coins were reintroduced in 1946, followed by aluminium-bronze 2 kroner coins the next year. In 1960, the 5 kroner coin was introduced and the production of 2 kroner coins ceased. 1 and 2 øre coins were withdrawn in 1963, 10 kroner coins were introduced in 1979. 5 and 10 øre coins were withdrawn in 1986 and are no longer legal tender. Between 1989 and 1992, 50 øre, 2 and 20 kroner coins were introduced, and in 2008 the 25 øre ceased to be legal tender. Thus the following coins are currently in circulation:

The decision to withdraw the 25 øre coin, which went in effect on 1 October 2008, was made due to high costs of production, and a lack of purchasing power for the coin. It is currently still be possible to exchange it at the Danish National Bank for an as of yet undetermined period of time^[2].

Banknotes

In 1875, the National Bank introduced denominations of 10, 50, 100 and 500 kroner, with 5 kroner following in 1898. From 1891, a number of private banks issued notes, including the Aalborg Kreditbank, the Aarhus Kreditbank, the Dansk Købmandsbank, the Esbjerg Kreditbank, the Fredrikshavn Kreditbank, the Hjørring Kreditbank, the Odense Kreditbank, the Randers Kreditbank, the Thisted Kreditbank, the Varde Kreditbank and the Vejle Kreditbank. Denominations included 10 and 25 øre, 1, 2, 5, 10, 20, 25 and 50 kroner.

In 1914, 1 krone notes were introduced due to the outbreak of the First World War and were issued until 1921. In 1945, the Allied Command issued notes for 25 øre, 1, 5, 10, 50 and 100 kroner.

5 kroner notes were replaced by coins in 1960. The next new denomination was not introduced until 1972, when production of 1000 kroner notes began. In 1979, the 10 kroner note was replaced by a coin and 20 kroner notes were introduced, although these have since also been replaced by coins (both are, however, still legal tender).

Main article: Banknotes of Denmark, 1997 series

In 1997, a complete new series was issued ranging from 50 to 1000 kroner. During 2002-2005, additional security features were added.

The current designs of the Danish banknotes are going to be replaced between 2009 and 2012 ^[3]. The new theme for the banknotes is Danish bridges. The process of designing the new banknotes was initiated in 2006 by the Danish National Bank.

See also

• Denmark and the euro
• Banknotes of Denmark, 1972 series
• Banknotes of Denmark, 1997 series
• Scandinavian Monetary Union
• Swedish krona
• Norwegian krone
• Economy of Denmark
• Economy of Greenland
• Economy of the Faroe Islands

References

External links

• Royal Mint of Denmark see Denmark's coin series.

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