Faroese króna
Encyclopedia
The króna 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 oyru (singular oyra).
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.
From 14 October 1940, new banknotes were printed "on behalf of the National Bank of Denmark". 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 nine, 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
.
On 18 December 1940, the Faroese króna was pegged to the British pound at a rate of 22.4 krónur = 1 pound. 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. 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. 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. 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.
In early August 2009, the Faroe Islands applied to introduce the euro.
r are exchanged to Faroese krónur and vice versa by the National Bank of Denmark
free of charge. While normal Danish bank notes are no longer intended as 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 is officially the same currency as the Danish krone and that the notes can be exchanged by any Danish bank without charge. Consequently, very few Danish stores will accept Faroese notes. People 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.
During the late 19th century, German national C.F. Siemsen, a merchant conducting business in both the Faroe Islands and Iceland, issued his own private coinage. This issue is brass, one side carrying the inscription: CFS and the other side the denomination: 4 or 16 skilling in goods ("x SKILLING I VARE"). Due to a shortage of currency in 1929-33, two merchants issued their own coins as well; J.F. Kjølbro in Klaksvík
and S.P. Petersens Eftf in Fuglafjørður
. The Kjølbro issue is aluminium coins with denominations of 10, 25 and 50 øre, and 1, 2, 5, and 10 kroner. S.P. Petersens Eftf's issue was made of brass in denominations of 5, 10 and 25 øre, and 1, 2 and 5 kroner.
During World War II, the Faroe Islands were separated from Denmark proper due to the occupations by the United Kingdom and Germany respectively. In 1941, a set of coins (1, 2, 5, 10 and 25 øre) was minted in London to alleviate a shortage of small change. This issue was identical to the pre-war Danish coinage already circulating, but is easily identified: the coins minted in London were made of bronze and copper-nickel, while the comparable coins minted in Denmark in 1941 were made of aluminium and zinc (with one exception). In addition, the British made set lacks both the mark of the Royal Danish Mint (a small heart) and the initials of the engraver and the mint master in Copenhagen.
. 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.
used to be the sole supplier of Faroese banknotes to collectors, but does not sell banknotes anymore.
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...
of the Faroe Islands
Faroe Islands
The Faroe Islands are an island group situated between the Norwegian Sea and the North Atlantic Ocean, approximately halfway between Scotland and Iceland. The Faroe Islands are a self-governing territory within the Kingdom of Denmark, along with Denmark proper and Greenland...
. It is issued by the Danish National Bank
Danmarks Nationalbank
Danmarks Nationalbank is the central bank of the Kingdom of Denmark. It is a non-eurozone member of the European System of Central Banks . The bank issues the Danish currency, the krone....
. It is not an independent currency but a version of the Danish krone
Danish krone
The krone is the official currency of the Kingdom of Denmark consisting of Denmark, the Faroe Islands and Greenland. It is subdivided into 100 øre...
. Consequently, it does not have an ISO 4217
ISO 4217
ISO 4217 is a standard published by the International Standards Organization, which delineates currency designators, country codes , and references to minor units in three tables:* Table A.1 – Current currency & funds code list...
currency code. The ISO 4217 code for the Danish krone is DKK. The króna is subdivided into 100 oyru (singular oyra).
History
When German forces occupied Denmark on 9 April 1940, the Danish kroneDanish krone
The krone is the official currency of the Kingdom of Denmark consisting of Denmark, the Faroe Islands and Greenland. It is subdivided into 100 øre...
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.
From 14 October 1940, new banknotes were printed "on behalf of the National Bank of Denmark". 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 nine, 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
Løgting
Løgting is the unicameral parliament of the Faroe Islands, a self-ruling dependency of Denmark.The name literally means "Law Thing" - that is, a law assembly - and derives from Old Norse lǫgþing, which was a name given to ancient assemblies. A ting or Þing has existed on the Faroe Islands for over...
.
On 18 December 1940, the Faroese króna was pegged to the British pound at a rate of 22.4 krónur = 1 pound. 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. 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
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
, meaning the County of Faroe), and one representative of the Løgting or the parliamentary National Board. In 1941, coins were struck in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
for use on the Faroe Islands.
As of 12 April 1949, the Faroese króna was separated from the pound sterling
Pound sterling
The pound sterling , commonly called the pound, is the official currency of the United Kingdom, its Crown Dependencies and the British Overseas Territories of South Georgia and the South Sandwich Islands, British Antarctic Territory and Tristan da Cunha. It is subdivided into 100 pence...
and fixed to the Danish krone
Danish krone
The krone is the official currency of the Kingdom of Denmark consisting of Denmark, the Faroe Islands and Greenland. It is subdivided into 100 øre...
at parity. 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.
In early August 2009, the Faroe Islands applied to introduce the euro.
Exchange with the Danish krone
Danish kroneDanish krone
The krone is the official currency of the Kingdom of Denmark consisting of Denmark, the Faroe Islands and Greenland. It is subdivided into 100 øre...
r are exchanged to Faroese krónur and vice versa by the National Bank of Denmark
Danmarks Nationalbank
Danmarks Nationalbank is the central bank of the Kingdom of Denmark. It is a non-eurozone member of the European System of Central Banks . The bank issues the Danish currency, the krone....
free of charge. While normal Danish bank notes are no longer intended as legal tender
Legal tender
Legal tender is a medium of payment allowed by law or recognized by a legal system to be valid for meeting a financial obligation. Paper currency is a common form of legal tender in many countries....
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 is officially the same currency as the Danish krone and that the notes can be exchanged by any Danish bank without charge. Consequently, very few Danish stores will accept Faroese notes. People 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
The Faroe Islands use standard Danish coinage, but the region has experienced a shortage of small currency on several occasions, leading to non-standard issues.During the late 19th century, German national C.F. Siemsen, a merchant conducting business in both the Faroe Islands and Iceland, issued his own private coinage. This issue is brass, one side carrying the inscription: CFS and the other side the denomination: 4 or 16 skilling in goods ("x SKILLING I VARE"). Due to a shortage of currency in 1929-33, two merchants issued their own coins as well; J.F. Kjølbro in Klaksvík
Klaksvík
Klaksvík is the second largest town of the Faroe Islands.The town is located on Borðoy, which is one of the northernmost islands ....
and S.P. Petersens Eftf in Fuglafjørður
Fuglafjørður
Fuglafjørður is a village on Eysturoy's east coast in the Faroe Islands. Its name means "fjord of birds".* Population: 1562* Location: * Postal code : FO 530* Municipality: Fuglafjardar* Football team: ÍF Fuglafjørður...
. The Kjølbro issue is aluminium coins with denominations of 10, 25 and 50 øre, and 1, 2, 5, and 10 kroner. S.P. Petersens Eftf's issue was made of brass in denominations of 5, 10 and 25 øre, and 1, 2 and 5 kroner.
Banknotes
In 1940, Danish 5, 20, 50, 100 and 500 kroner notes were overstamped with Kun Gyldig paa Færøerne, Færø Amt, Juni 1940 (meaning “Only valid on the Faroe Islands, Faroe County, June 1940”) for issue on the Faroe Islands. Later that year, the Færø Amt issued distinct notes in denominations of 1, 5, 10 and 100 kroner. From 1951, notes were issued with texts in FaroeseFaroese language
Faroese , is an Insular Nordic language spoken by 48,000 people in the Faroe Islands and about 25,000 Faroese people in Denmark and elsewhere...
. 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
Security printing
Security printing is the field of the printing industry that deals with the printing of items such as banknotes, passports, tamper-evident labels, product authentication, stock certificates, postage stamps and identity cards...
was introduced to replace older notes. Denominations are 50, 100, 200, 500 and 1000 krónur.
Numismatics
Postverk FøroyaPostverk Føroya
Posta is the postal service of the Faroe Islands and was founded on 1 April 1976 under the Home Rule of the Faroe Islands. On 16 December 2005, it became a public joint stock company under the name P/F Postverk Føroya ....
used to be the sole supplier of Faroese banknotes to collectors, but does not sell banknotes anymore.
See also
- Exchange rate regimeExchange rate regimeThe exchange-rate regime is the way a country manages its currency in relation to other currencies and the foreign exchange market. It is closely related to monetary policy and the two are generally dependent on many of the same factors....
- British occupation of the Faroe Islands in World War IIBritish occupation of the Faroe Islands in World War IIThe British occupation of the Faroe Islands in World War II, also known as "Operation Valentine," was implemented immediately following the German invasion of Denmark and Norway....
- Economy of the Faroe IslandsEconomy of the Faroe IslandsAfter the severe economic troubles of the early 1990s, brought on by a drop in the vital fish catch and poor management of the economy, the Faroe Islands have come back in the last few years, with unemployment down to 5% in mid-1998, and holding below 3% since 2006, one of the lowest rates in Europe...
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.