Danish Krone

Danish Crown

History of the Danish Crown

The Danish Krone appeared only at the beginning of the 17th century, it was introduced in 1619. Denmark’s economy has been severely affected by armed conflicts. Attempts were made to improve the economy by introducing different monetary systems, until in 1873 the authorities decided to establish the Scandinavian Monetary Union, which Norway joined two years later. In the post-war period, the value of the crown was based on the British Pound, and then until the dissolution of Bretton Woods on US currency. In 1993, a referendum was held in which the Danes opted for accession to the European Union, but rejected the possibility of adopting the common currency – the Euro.

Danish Krone symbols, coins and banknotes

Danish banknote designs were introduced in 2009-2011. Danish currency has banknotes in denominations: 50 Kroner, 100 Kroner, 200 Kroner, 500 Kroner, 1000 Kroner. Danish currency coins are: 50 øre and 1, 2, 5, 10, 20 and 50 Kroner. The DKK 1, 2 and 5 coins have a hole in the center to help blind people distinguish them. On Danish coins, this is a symbol referring to the leaves of the water lily, which was in the medieval coat of arms of Denmark. The coins are quite distinctive. They differ significantly in weight, size and raw material.

Crown of the Faroe Islands

In the Faroe Islands, apart from the Danish Krone, there is another currency called “ oyra ” by the locals. It is the Faroese Krona, whose banknotes can only be used in the Islands and their exchange for Danish Krone during a visit on land takes place without any commission and at the rate of 1:1.

A straight line of the EUR/DKK chart

The fluctuation band of the crown against the Euro does not exceed 0.50% due to the ERM II exchange rate mechanism. As part of this mechanism, Denmark has committed itself to maintaining a fluctuation band of the Koruna against the Euro in the range of +/- 2.25%. This is why the chart for the EUR/DKK or DKK/EUR currency pair resembles a straight line.

First negative interest rate

Denmark was the first country in the world to lower its benchmark interest rate to a negative level. In 2012, the Danish authorities lowered the reference interest rate and its level was set at -0.6%. The Danish National Bank wanted to defend the exchange rate of the crown against the Euro. This procedure was to discourage investors from investing capital in crowns. This situation was reflected in the real estate market, where prices automatically increased due to the fact that investors, wanting to allocate their capital outside banks, started investing in the real estate market.