One of the fascinating things about going to another country is that everything is new. From the people to the cuisine to the culture; even the money looks different! Icelandic currency is no exception, so we thought we’d dive into this interesting topic.
What is the currency in Iceland?
Many people mistakenly think that we use the Euro, but that’s not the case. The currency of Iceland is the Icelandic króna (ISK). The history of our money is a bit complicated as it was intertwined with Danish currency in the late 1800s. We began issuing our own króna even before we gained independence from the Danish crown in 1944.
The Bank of Iceland is our central bank and is in charge of printing money and keeping track of the bills in circulation.
What does Iceland currency look like?
In my completely unbiased opinion, our money is actually some of the prettiest in the world. We’ve got multicolored bills in shades of purple, red, green, brown, and blue. They come in denominations 500, 1000, 2000, 5000, and 10000. As in many countries, the value of each note has different dimensions. We’ve also got coins with smaller values.
The banknotes feature important figures from our history and culture such as poet and author Jónas Hallgrímsson, painter Jóhannes Kjarval, and prominent Icelander Ragnheiður Jónsdóttir. We struggled for so long to gain independence from foreign rule (first Norway and then Denmark). So it makes sense that we want our currency to reflect our proud Icelandic heritage.
Do I need Iceland money during my trip?
To be perfectly honest, you don’t really need to have the local money in your pocket during your trip to Iceland. They accept credit cards pretty much everywhere, and you can also use your debit card. So when buying all of those clothes, souvenirs, and other items like a lopapeysa sweater, it’s likely you won’t need to pay using krona currency.
In fact, because Iceland is such an international destination, you’ll find that many times we accept cash from other countries. It’s not unusual for vendors, bars, and restaurants to take Euros, US and Canadian dollars, as well as money from Sweden, Norway, and Denmark. It just makes sense, given the sheer number of tourists that we receive from countries who use this other money as their legal tender.
Where to exchange money for your trip
If you do decide that you want to have some Icelandic krona in your wallet while you travel, there are a few options at your disposal.
The first, easiest, and the way that I recommend is to just take money out of an ATM once you are here. I always do this when I travel abroad and find it to be the most hassle-free. Banks also tend to give the best rates, so I know I’ll be getting the best deal. The trick is to make sure beforehand that your bank doesn’t charge for foreign withdrawals. You may encounter a fee at the ATM, so it’s usually better to take out larger sums if you do use this method.
The second option is to exchange money at home before you leave. Because banks offer better rates than currency exchange offices, this is also a good choice. The tip here is to give your bank ample lead time to get you the foreign money. It could take them a few days or even a week to get you your krona.
Lastly, you can use exchange bureaus, but as a last resort. The rates they offer are really bad plus they usually charge a commission on top.
As I mentioned before, Icelandic money is really beautiful, so I understand why you might want to hold on to a few bills as mementos of your trip.
What’s the current exchange rate for Iceland’s currency?
Many people like to get an idea of how our money stacks up against other countries’, such as Iceland currency to USD. As of today, these are the rates of some major world currencies as compared to Iceland’s currency.
1 USD = 124 króna
1 EUR = 139 króna
1 GBP = 157 króna
1 DKK = 19 króna
1 SEK = 13 króna
1 NOK = 14 króna
You’ve also got this helpful currency calculator for the most up-to-date information.
What about tax-free shopping?
One of the benefits of being a foreign visitor to Iceland is that your purchases are tax-free. You can get a VAT refund of up to 24% on certain items that you buy if you paid more than 6000 ISK. All you have to do is ask for the tax-free receipt when you buy something and make sure that the retailer signature is on the tax-free form.
When you arrive at Keflavik, allow yourself some extra time to get your form validated at the Arion bank or at customs (depending on the amount). After that, you’ll head to the tax refund point in the international airport.
Your guide to Icelandic currency
I hope this has covered everything you need to know about Icelandic currency. While enjoying all the things to see and do, you’ll be at ease knowing money’s not an issue. Please let us know if you have any further questions and what your experiences are with our colorful money!