The Icelandic Krona (ISK) is the official currency of Iceland since the country's independence in 1944. The national bank of Iceland issues currency in various denominations, with notes issued in the denominations of 50, 100, 500 and 1000 kronur and coins issued in denominations of 1, 5, 10, 20 and 50 aurar. The circulating currency is also used to determine the exchange rate with other currencies.The Icelandic króna is pegged to the euro (1 EUR = 119.764 ISK). The word krónur comes from the old Norse word "krufn" meaning "to cut", with the implication that coins would be cut from a larger standard currency piece. This is indeed what happened, as the first Icelandic coins were cut from Thule and Greenland currency.The first Icelandic króna was introduced on 10th July 1885 by royal decree and replaced the Danish krone which had been used as the currency of Iceland since 1875. It was equivalent to the Danish krone (1 Danish krone = 1 Icelandic króna). Before 1885, Iceland used the Danish currency system, consisting of 16 penning = 1 rigsdaler = 4 ort = 32 skilling.
