FAROESE KRóNA

The 'króna' (plural: ''krónur'') is the currency of the Faroe Islands. It is issued by the Danish National Bank. It is not an independent currency but a version of the Danish krone. Consequently, it does not have an ISO 4217 currency code. The ISO 4217 code for the Danish krone is ''DKK''. The króna is subdivided into ''100 oyrur'' (singular ''oyra'').

Contents

History

Exchange with the Danish krone

Coins

Banknotes

See also

References

External links

History

When German forces occupied Denmark on 9 April, 1940, the Danish krone was used in the Faroes. However, all exchange between the Faroes and Denmark halted as a result of the occupation, leaving one currency to develop in two markets independently of each other. On 31 May, 1940, special Faroese banknotes were introduced. They consisted of Danish notes with a special stamp. These notes replaced unstamped Danish at par.^[1]
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 pegged to the British pound at a rate of 22.4 krónur = 1 pound.^[3] 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] In 1941, coins were struck in London for use on the Faroe Islands.
As of 12 April, 1949, the Faroese króna was separated from the pound sterling and fixed to the Danish krone at parity.^[7] This arrangement is still in effect. Although Faroese banknotes were issued ''"on behalf of the National Bank of Denmark",'' the National Bank of Denmark does not claim any rights to Faroese banknotes issued prior to 1951.^[8]

Exchange with the Danish krone

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, and so many Danish stores will not accept Faroese notes. Persons travelling 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.

Coins

In 1941, a set of coins (1, 2, 5, 10 and 25 øre) were minted in London. These had the same design as the Danish coins already in circulation, but the markings of the mint and the mint master were left out.

Banknotes

In 1940, Danish 5, 20, 50, 100 and 500 kroner notes were overstamped with ''Kun Gyldig paa Faerøerne, Faerø Amt, Juni 1940'' for issue on the Faroe Islands. Later that year, the Faerø Amt issued distinct notes in denominations of 1, 5, 10 and 100 kroner. From 1951, notes were issued with texts in Faeroese. The 1 kroner note was not continued, with 50 krónur introduced in 1967, followed by 500 and 1000 krónur in 1978, 20 krónur in 1986 and 200 krónur in 2003. Between 2001 and 2005, a new banknote series with new security features was introduced to replace older notes. Denominations are 50, 100, 200, 500 and 1000 krónur

See also

★ Exchange rate regime

★ The British occupation of the Faroe Islands 1940-1945

★ Economy of the Faroe Islands

References

1. Færöernes Kundgörelsessamling 1940, p. 7 - Gazette of the Faroes, Danish language.
2. Færöernes Kundgörelsessamling 1940, p. 40 - Gazette of the Faroes, Danish language.
3. Færöernes Kundgörelsessamling 1940, p. 62-64 - Gazette of the Faroes, Danish language.
4. Færöernes Kundgörelsessamling 1940, p. 62-64 - Gazette of the Faroes, Danish language.
5. Færöernes Kundgörelsessamling 1941, p. 19-21 - Gazette of the Faroes, English and Danish language.
6. Færöernes Kundgörelsessamling 1941, p. 22 - Gazette of the Faroes, Danish language.
7. Lov nr. 248 frá 12. april 1949 om pengesedler m.v. på Færøerne - Act about Banknotes and more on the Faroes. Danish language.
8. The previous Faroese banknote series - The National Bank of Denmark.


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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.