Cash in Swedish krona (SEK)
History of the Swedish krona
Before the appearance of this currency, Sweden used the riksdaler. The krona appeared in 1876 due to the Scandinavian Monetary Union, which circulated a new currency. The participants of this union, in addition to Sweden, were Denmark and Norway, which used the krona as the primary means of payment.
The word "krona" itself was derived from the German word "Krone", which means "crown". The krona monetary unit was backed by the gold standard and equated in value to about 0.4 grams.
The Scandinavian currency union lasted until World War I, but the krona currency is still used for payments in Sweden today. Then, during World War I, the gold standard was abolished, and the krona exchange rate became freely quoted. Since then, the currency has been fiduciary or fiat, meaning it is unsecured by anything.
In 1982, Sweden experienced the so-called "Big Bang" (stora smällen), symbolizing the country's economic crisis at the time, leading to the krona's devaluation. As a result, the krona fell in value by 16 per cent. The name "Big Bang" refers to a well-known term from physics and astronomy, meaning the birth of the universe — this is how economic and political figures characterized the birth of the new economic era of the Swedish state.
Coins and banknotes
One krona is divided into 100 parts, named the ere. However, in 2010, they stopped producing coins in denominations of less than 1 krona. The last time the coin design was updated was in 2012 when the Riksbank introduced a new series with a larger size.
Sweden currently issues coins in 1, 2, 5 and 10 kroner denominations. The design of the new coins echoes the title theme from the song "Sol, vind och vatten" (translated as "Sun, wind and water") by famous Swedish singer Ted Gerdesstad. The 1 and 2 krona coins are made of copper-coated steel, while the 5 and 10 krona coins are made of a gold-coloured copper-aluminium alloy known as "Nordic gold".
Although the kroner did not replace the riksdaler until 1876, the first banknotes were printed two years before the Scandinavian Monetary Union came into force. The Riksbank put into circulation banknotes in denominations of 1, 5, 10, 50, 100, 500 and 1000 kroner. All old-style banknotes were withdrawn from circulation in 2016 — 2017, and banknotes with denominations of less than 20 kroner were no longer issued. Banknotes of 20, 50, 100, 200, 500 and 1000 kronor are now circulating. The largest note ever created in Sweden in terms of denomination was the 10,000 kroner note. However, no banknotes larger than 1,000 kroner are now issued.
One of the peculiarities of banknotes issued in Sweden is that they differ not only in denomination but also in colour. On the front side (obverse) of modern banknotes are depicted famous and significant persons or even fictional characters, and on the reverse (reverse) — are cities of great historical and cultural value, along with common plants or landmarks:
- 20 kroner (purple) features the famous Swedish writer Astrid Anna Emilia Lindgren and her most famous character, Pippi Longstocking, as well as the "three crowns", the national symbol of Sweden. The reverse side depicts the historic province in southern Sweden, Småland, and the Linnaeus flowers, common in the Nordic countries;
- 50 crowns (orange) — the famous Swedish writer, artist and composer Axel Evert Taube, the Swedish province in Getaland Bohuslen and Honeysuckle;
- 100 kroner (blue) — Swedish-American actress Greta Garbo, considered one of the greatest film actresses of all time, and Stockholm, Sweden's capital and most populous city;
- 200 kroner (green) — Swedish theatre and film director Ernst Ingmar Bergman, the island of Gotland and the limestone rauk;
- 500 kroner (red) — famous Swedish soprano singer Martha Birgit Nilsson, the Eresund Bridge and the Bullseye daisy flower, which is also known as Chamomile;
- 1000 kroner (brown) — Swedish economist and diplomat Dag Jalmar Agne Carl Hammarskjöld, the United Nations (UN) Secretariat Building and its flag, and Lapland.
Swedish krona exchange rate
The currency is listed on stock exchanges under the ticker SEK. At the time of writing, the exchange rate of the Swedish krona to the US dollar was $0.091. Like practically all other currencies, SEK has become cheaper against USD: over the last 10 years, the price of SEK against USD has decreased by about 40%. At the same time, the SEK exchange rate continues to decline, including against the EUR.
The role of the krona in national and regional economies
Sweden is considered to be the most cashless country on the planet. The Swedish government has restricted the issuance of cash, which has reduced the budget for the costs associated with the printing press.
In addition, Sweden is one of the record holders in the number of robberies: in 2008 alone, more than 110 Swedish banks were robbed. In this way, the government wants to reduce the number of bank robberies, which has dropped by 95 per cent due to the measures taken, and in 2012 only 5 banks were robbed.
The first attempts to switch to cashless payments started in 2006, and Sweden became the first country with its own sovereign payment and acquiring system, Payment Service Provide (PSP).
What can cash kroner be exchanged for?
According to analysts, less than 20 per cent of shops accept cash payments (both kroner and euros), and only 2 per cent of all payments in Sweden are in cash. Also, the government plans to limit the amount for cash payments to just 70 kroner, equivalent to $6.4.
Therefore, if you travel around Sweden or live in this country, it is better to convert some cash kroner to non-cash; otherwise, you may have difficulties paying for goods or services. Many shops, restaurants, and museums only accept cashless payments via bank card or Swish mobile payments. Cash can be deposited into a bank account at an ATM, paying a fee to the bank.
Cash crowns can be exchanged for other currencies, gold and other exchange commodities, but the bank will charge a fee for each transaction. You can do this through a bank and special exchange offices, but they may charge even more. It may be more favourable to open a brokerage account, deposit cash and exchange the kroner for the desired asset.
It is unnecessary to open an account in a Swedish bank to deposit cash through an ATM, but when using cards from foreign banks, you will be charged an additional currency conversion fee, which is not very favourable. The same goes for card payments if there are no kroner in your bank account.
To obtain a visa, non-residents will need at least 450 kroner for each day they stay in Sweden. In addition, by law, non-residents can only pay for goods and services in kroner, as Sweden has not yet ratified the euro agreement.
