|
|
|
|
Currencies |
| SWEDISH KRONA |
 |
| Introduction
| Overview | Structure
| History | Factors
affecting change in exchange rates | Daily
trend of Swedish krona | Weekly
trend of Swedish krona |
| Introduction |
|
Krona is the national currency of three European countries that
are Sweden, Iceland, Faroe Islands. The most important of all
among these krona currencies is the national currency of Sweden
that is called Swedish krona. The current Swedish currency came
into existence in the year 1873 when it replaced the prevailing
currency of that time - riksdaler. Swedish krona is also termed as
"Swedish crown" and "Couronne suédoise" in
the French language. The currency is often depicted with "kr"
and is called "kronor" in plural form. "Öre"
supports the currency as its subunit, in plural terms it is known
as "ören". ISO 4217 regulation describes the currency
code and numeric code for Swedish krona as SEK and 752
respectively. The word "krona" or "krone"
means "crown" in English language.
|
|
Overview
|
|
Swedish krona is one of the few, still prevailing, currencies in
Europe, most currencies having being replaced by euro. Swedish
krona is the most dominant currency amongst the other existent
krona currencies. It is the eighth most traded currencies in the
world and is actively traded in the world market. The country is
basically a net exporter and has been enjoying a sustained growth
and stability over a decent period of time. The currency somewhat
helps this growth rate to keep strong. As krona is indulged in a
large amount of foreign trade, the value of the currency is
dependent upon the economic status of other countries. Also, the
exchange rate of Swedish krona that was floated in 1992, is
largely dependent upon the monetary policies of the country.
When the European continent was planning to
establish a common currency for all the countries in 1997, Sweden
refused to give up its own currency, but the country has to
convert its krona to euro at some point or the other as it would
be joining the Euro zone according to the "Accession
Treaty", 1995. The Swedish referendum held in 2003 suggested
an opposition regarding the adoption of euro and that is why it is
still continuing with krona as its currency. The import and export
of all the currencies in the country is free. Many a previous
krona currency notes were discontinued and are no longer redeemable
now except the 500kr note that was withdrawn from circulation in
1989 and is still redeemable.
|
|
Structure
|
The Swedish krona is managed and distributed by
the Sveriges Riksbank i.e. the central bank of
the country. The bank gets the banknotes printed
from Tumba Bruk, a printing company that was
established by the Sveriges Riksbank for the
manufacture of currency banknotes. Recently,
this printing company has been sold to the current
owner, Crane Paper company. The coinage in the
currency is issued in 5 denominations, 50 öre
coin being the smallest value among them. The
other denominations are 1kr, 2kr, 5kr, 10kr, the
2kr coin being rarely used. The appearance and
design of the coinage in Swedish krona is taken
care of by the General Council of the Riksbank.
The side showing the denomination of the coin
has two letters engraved on it besides the
denomination, the left letter standing for the initially
of the place the coin has been minted and the
letter on the right stands for the initial of
the bank’s governor's name. The other sides of
different coins depict different symbolic
images. Besides the currency coins, there is a
long list of commemorative coins that had been
issued on various occasions and achievements in
gold, silver, Nordic gold, copper/nickel having
values 2000kr, 200kr, 50kr and 1kr respectively.
The krona banknotes are also issued in 5
denominations - 20kr, 50kr, 100kr, 500kr and
1000kr. The notes bear signatures of the
chairman of general council and the governor of
riksbank. The notes of different sizes and
colors, 20kr note being bluish purple, 50kr note
being yellow, 100kr note having light blue
color, 500kr being reddish gray in color and
1000kr note is in yellowish gray color. In 2004,
a commemorative 100kr banknote was also issued
by the central bank of the country on the
occasion of Tumba Burk paper mill’s 250th
anniversary.
|
|
|
| History |
|
Sweden was using riksdaler as its currency till 1873
when the currently prevailing currency that is the
Swedish krone replaced it. The riksdaler served as the
country’s national currency for a long time as it
was being used since 17th century. The name riksdaler
was taken from the German word "thaler",
from which the names of other European currencies were
also taken such as "Reichstaler" (German
currency), "Rijksdaalder" (currency of
Austria-Hungary) and "Rigsdaler" (currency
of Denmark-Norway). This old currency had a complex
subunit division system consisting of mark, öre,
penning and later on skillingar and runstycken. In
1885, the Swedish currency adopted the decimal system
with the introduction of a new version of the currency
that was the "riksdaler riksmynt".
Swedish krona came into existence
when the country agreed to join the Scandinavian
Monetary Union, the other members being Denmark and
Norway. These three countries fixed the value of their
respective currencies against gold to gain monetary
stability. This union lasted until the World War I
resulting the countries to lose their pegs to gold.
Sweden held on to the same currency and same name of
the currency even after the monetary union was
discarded. The same currency is in operation till date
even though the other two currencies of the union have
switched over to the euro in recent times.
|
| Factors
affecting the exchange rates between two countries
|
|
The volatility in the foreign exchange rates
depends upon a numerous macro economic factors that
have different degrees of importance to different
economies of the world. Some special and exceptional
factors affecting the rates may also exist in the case
of different countries. Following are shown the common
factors on which the foreign exchange rate depends
- Flow of imports and exports between the
countries
- Flow of capital between the countries
- Relative
inflation rates
- Fluctuation limits on exchange rate
imposed by the governments of the countries
- Merchandise trade balance
- Rate of inflation in the country
- Flow of
funds between the countries for the payment of
stock and bond purchases
- Relative growth
- Short term
and long term interest rate differentials
- Cost of borrowings
|
|
|
|
|
|
|
|
|
