Czech Koruna

• Country: Czech Republic
• Currency: Koruna
• Alias: Czech koruna
• ISO 4217 CODES: CZK/203
• Symbol: Kc

The Czech koruna is the official currency of the Czech Republic, one of two nations created from the division of the former Czechoslovakia in 1993. The koruna remained fairly stable for several years afterward, but then entered into slow decline, which ultimately culminated in a recession in 1998. Recovery has been brisk, benefited by strong foreign investment and privatization of several industries. The Czech Republic is now a member of the European Union, and preparations are underway to abandon the koruna in favor of the euro in the near future.

Background of the Czech Koruna

The Czechoslovak crown had been the national currency of Czecholslovakia from 1918 leading up to the annexation of large portions of the country by Germany in 1938. After World War II ended, the Czechoslovak crown resumed its role as the national currency. Czechoslovakia split into the Czech Republic and the Slovak Republic on January 1, 1993. The Czech Republic became a member of the North Atlantic Treaty Organization in 1999.

The country’s economic transformation from the days of communist rule to the present day has been remarkable. The Czech Republic’s modern industrial output consists of motor vehicles, iron and steel productions, transportation equipment, electronics, ceramics and glass. The country has also become a significant recipient of foreign investments over the last decade, with Germany, the Netherlands and the United States providing major infusions of capital into the local economy.

Koruna translates as “crown” in the Czech language. The currency and the country’s monetary policy are administered by the Czech National Bank. The koruna became a fully convertible currency beginning in 1995, and began to float in 1999. After gaining admission to the European Union in 2004, the koruna became pegged to the euro as the government began preparations for an eventual transition to the euro currency under the terms of the Exchange Rate Mechanism (ESM) II.

The koruna is divided into 100 hellers (or haleru). Denominations for coins are 50h, 1Kc, 2Kc, 5Kc, 10Kc, 20Kc and 50Kc. Denominations for banknotes are 20Kc, 50Kc, 100Kc, 200Kc, 500Kc, 1000Kc, 2000Kc and 5000Kc.