Economics

What is the Currency of Estonia?

The official currency of Estonia is the Euro.

The official currency of Estonia is the euro whose currency symbol is € and EUR is its code. However, the kroon whose currency code is EEK and symbol is Kr used to be the country's official currency between the years of 1928 and 1940, and also between 1992 and 2011. The euro started circulating with the kroon between January 1 and 14, 2011, after which Estonia made the euro its sole legal tender. The term Kroon is derived from corona which is a Latin word meaning crown; it is also related to currencies of the Nordic countries such as the Norwegian and Danish krone or the Swedish krona. During the first historical period of its use, the kroon was in circulation until the country was invaded and subsequently incorporated into the Soviet Union; the Soviet ruble replaced the kroon. However, following the downfall of the Soviet Union and Estonia gaining its independence, the kroon was reintroduced again in circulation.

The 1st Kroon

On January 1, 1928, the Kroon became Estonia's official legal tender, but it had been a unit of account since 1924. At a rate of 100 marks being equivalent 1 kroon, the first kroon replaced the Estonian mark which was the country's official currency between 1918 and 1927. The kroon was subdivided into 100 cents. The kroon was exchanged for foreign currency by the Bank of Estonia so that it could secure credibility. The first krooni coins issued in 1928 were 25 senti pieces of nickel-bronze. In 1929, the bronze 1 senti were issued followed by the 1930 silver 2 krooni, 1931 nickel-bronze 10 senti, and bronze 5 senti. In 1933 silver 1 kroon, the 1934 aluminum-bronze 1 Kroon, and bronze 2 senti, 1935, nickel bronze 20 senti, and eventually 1936, nickel-bronze 50 senti. The new 1 senti coin was issued on July 25, 1940, which was a few days after the Estonian SSR was founded. As for the krooni banknotes, in 1928, ten krooni notes were introduced by the Eesti Pank followed by the 1929, 50 and 5 krooni, the 1932, 20 krooni and 1935, 100 krooni.

The 2nd Kroon

On June 20, 1992, Estonia which was now an independent country reintroduced the kroon as its official currency; the Soviet ruble was replaced at a rate of 1 kroon being equivalent to 10 Soviet rubles. Denominations of 1 kroon, 50, 20, 10 and 5 senti were introduced in the country in 1992. The senti were struck in aluminum-bronze while the kroon was cupro-nickel. However, 20 senti struck in nickel-plated steel, and 1 kroon in aluminum-bronze was introduced in 1997 and 1998 respectively. Second krooni banknotes were introduced in 1992 in denominations of 500, 100, 25, 10, 5, 2, and 1 kroon. However, some of the issued banknotes were dated 1991. The 50 krooni note was introduced in 1994; just like the one kroon banknotes, the 50 krooni were only issued once.

The Introduction of the Euro

Estonia was the first former Soviet Union republic to join the Eurozone, but the Estonian euro currency entered into circulation on January 1, 2011. The Euro, which is now the country’s official legal tender, circulated alongside the kroon until January 15, 2011 when the kroon ceased to exist as the legal tender. Before euro coins were introduced, the one kroon coins struck in cupro-nickel had already been demonetized on May 31, 1998, while the five krooni coins were rarely being circulated. The Eesti Pank exchanges kroon coins and banknotes of any amount into the Estonian euro.

More in Economics