Swedish Krona (SEK) Definition

What is the Swedish Krona (SEK)?

SEK is the currency code for Swedish Krona, the currency of Sweden. The Swedish krona is made up of 100 penny and is often presented with the symbol “kr”.

The krone, which means “crown” in Swedish, has been the currency of Sweden since 1873 and is also expressed by the symbol KR. It replaced Swedish riksdaler.

In August 2022, one SEK was worth approximately $0.10.

Key points to remember

  • The Swedish krona is the official currency of Sweden.
  • The currency code for the krone is SEK, and the abbreviation is kr.
  • While Sweden is expected to adopt the euro at some point, there is little urgency as the Swedish population is not in favor of changing the currency.
  • The e-krona is a digital version of the krona, used via an app, and should phase out the use of cash.
  • The Swedish krona replaced the riksdaler national currency at par in 1873, when the Scandinavian Monetary Union was created.

Understanding the Swedish Krona (SEK)

The Swedish krona replaced the riksdaler national coin at par in 1873, when the Scandinavian Monetary Union was created.

The Scandinavian Monetary Union was a fixed exchange rate system – based on the gold standard – between Sweden and Denmark. Norway joined the Union in 1875. While the member countries still had their own currency, the Union provided exchange rate stability. This monetary union lasted until 1914.

Since the early 1990s, the exchange rate has been allowed to float against other currencies, with the central bank intervening if necessary to stabilize the value of the krone.

The most traded currency pair involving the SEK is the EUR/SEK, or the euro against the crown.

Sweden was to join the eurozoneand adopting the euro, as part of the 1995 EU Accession Treaty. However, the majority of politicians and citizens are not in favor of adopting the euro. There is therefore no urgency to abandon the krona, and from 2022 there are no plans to switch to the euro.

Despite Sweden’s relatively small economy, well-educated and tech-savvy workforce, and home to many multinational corporations, has led many Forex observers to rank the SEK among the refuge currency.

SEK and negative interest rates

In July 2009, Sweden became the first country to experiment negative interest rates when the Swedish central bank briefly lowered its deposit rate for commercial banks below zero. Initially, the SEK grew stronger; experts considered it positive that Sweden is taking a strong initiative to correct the economy in the midst of the Great Recession from 2007 to 2009.

However, over the next few years the Swedish economy floundered, and in 2014 the Riksbank again lowered the target rate to zero. In 2015, it announced a repo rate of -0.10%, which was further lowered to -0.50% in 2016, a level that was maintained until January 2019 when the rate was raised to – 0.25%. In December 2019, the rates fell to zero again.

SEK correlations

The SEK is strongly correlated with its Scandinavian counterparts, the Danish Krone (DKK) and the Norwegian Krone (NKK). The following chart shows SEK/USD, DKK/USD and NOK/USD on a chart; they tend to move together, although at times one may be stronger than the other.

TradingView.com

Swedish krona coins and banknotes

Currently there are 1, 2, 5 and 10 kroner (plural) coins in circulation. In terms of banknotes, there are 20, 50, 100, 200, 500 and 1,000 crown notes.

E-krona is a digital currency controlled by the Riksbank. It is redeemed through the Swish app. The e-crown has not been officially adopted as cash is still in use in the country. However, in the future, it is possible that cash payments will be completely eliminated.

Example of exchange rate conversion with the Swedish krona

Suppose the SEK/USD exchange rate is 0.1250. This means that it costs $0.1250 to buy one crown. To find how many crowns it takes to buy one US dollar, divide one by the exchange rate: 1 / 0.1250 = 8. It takes eight crowns to buy one US dollar. This is the rate for the USD/SEK currency pair; notice how the currencies have reversed position.

If the SEK/USD rate rises to 0.1425, the value of the SEK has risen against the USD and the USD has fallen against the koruna. It now costs more USD to buy a crown.

If the rate falls to 0.10, the SEK has lost value against the USD. It now costs less USD to buy one SEK.

Does Sweden still use the krone?

The Swedish Krona (SEK) is the official currency of Sweden.

Which countries have the currency “Krona”?

The krone is the official currency of Sweden. Krona literally means “crown” in Swedish. Other countries also have currencies called “crown”. In Norway, the monetary unit is known as crown. In the Czech Republic, the monetary unit is called the crown. In their respective languages, these two words can be translated as “crown”.

Is the Swedish krona pegged to another currency?

Since autumn 1992, the exchange rate of the Swedish krona has been floating. In 1939, days before the start of World War II, Sweden pegged the krone to the US dollar.

How can we exchange the old currency of the Swedish krona?

The Riksbank (the Central Bank of Sweden) offers an application process for the redemption of all invalid Swedish banknotes, regardless of age.

SEK is the currency code for Swedish Krona, the official currency of Sweden.

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