Economics

What is the Currency of the Czech Republic?

The official currency of the Czech Republic is the Czech koruna.

Introduction

The Czech Republic is located in central Europe. It is famous for its long history as relates to the Rennaissance era. The capital city of Czech Republic is Prague. According to the World Bank, the Czech Republic is home to approximately 10.56 million people. The currency used by Czech Republic is known as Czech koruna (Czech crown in English). It is internationally abbreviated as CZK and its symbol is Kč. 1 koruna can be further divided into 100 haléřů (hellers) and its sign is h. The hellers have not been circulated since 2008. Nevertheless, the merchandise prices are still quoted inclusive of the value of the hellers.

Failure to Adopt Euro

Although the Czech Republic is part of the European Union, the euro is rarely accepted by traders. Only a few hotels, stores, and restaurants may accept it, but at a very low exchange rate. The Czech Republic should have adopted the euro currency in 2010. Its economic performance matches the standard required by the European Union. In spite of this, the country halted discussions to adopt the euro as its currency in 2005. The public did not approve of the idea of switching currency. In fact, a survey carried out in 2014 indicated that only 16% of Czech inhabitants supported the idea. The figure has not increased over the years as it remains between 15% and 17%. Despite the current position, the Czech Republic may adopt the euro currency in the future.

History of the Czech Koruna

The Czech koruna became the currency of the Czech Republic in 1993. Prior to this, the country had been using the Czechoslovak koruna. The Czech koruna kept getting stronger year after year since its introduction. The Czech National Bank (ČNB) intervened in November 2013 through a monetary stimulus to weaken the exchange rate. Its action prevented excessive strengthening of the koruna.

Coins

When the koruna was introduced in 1993, the coins were denominated as 10, 20, and 50 haléřů, and 1, 2, 5, 10, 20, and 50 koruna. However, with time the 10 haléřů, 20 haléřů, and 50 haléřů were wiped out of circulation. The Czech Republic currently uses 1, 2, 5, 10, 20, and 50 koruna coins only. The country also has a tradition of minting silver and gold commemorative coins such as the 2000 Kč gold coin. It was issued in the year 2000 to celebrate 10 centuries of Czech architecture.

Banknotes

The first banknotes had adhesive stamps and were issued on February 8, 1993. Later that year, a new series of banknotes were issued. They were denominated as 20, 50, 100, 200, 500, 1000, and 5000 koruna notes. Subsequent issues of the 1,000- and 5,000- notes had improved security features. Presently, the notes used by the citizens of the Czech Republic are 100, 200, 500, 1,000, and 2,000 koruna. The 5,000 koruna note is in existence but is seldom used. The notes have portraits of important national figures such as Charles IV, St, Agnes of Bohemia, and Emmy Destinn. The Czech koruna is mostly traded with the USD, EUR, JPY, GBP, and CHF. The most popular currency trading being EUR/CZK.

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