WCURRENCY

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Overview

The Swedish Krona (SEK), symbolised by kr, is the official currency of Sweden. One krona is divided into 100 öre, though öre coins are no longer issued. The SEK is managed by Sveriges Riksbank, the world's oldest central bank, founded in 1668.

Sweden is a member of the European Union but has not adopted the euro. In a 2003 referendum, Swedish voters rejected the euro by 56% to 42% — a decision that has never been formally revisited. Joining the eurozone would require another referendum or a parliamentary decision.

The SEK floats freely and is one of the more liquid currencies among European non-euro economies. It tends to behave as a risk-sensitive currency: strengthening in periods of global risk appetite and weakening during flight-to-safety episodes, due to Sweden's export-heavy, open economy.

History

Sweden introduced its first paper money in Europe in 1661 — issued by Stockholms Banco, the predecessor to the Riksbank. The experiment ended in hyperinflation when the bank issued more notes than it held in copper reserves, leading to the bank's closure and the establishment of the Riksbank in 1668.

The krona was introduced in 1873 when Sweden joined the Scandinavian Monetary Union with Norway and Denmark, replacing the riksdaler at a rate of 1 krona = 100 öre. The union ended with World War I, and Sweden subsequently moved through a gold standard, Bretton Woods peg, and finally adopted a floating exchange rate in 1992 — triggered by a dramatic speculative attack.

In September 1992, during the European Exchange Rate Mechanism (ERM) crisis, Sweden tried to defend a DEM-linked peg by raising its overnight interest rate to an extraordinary 500% for one day. The defence failed; Sweden floated the krona and the exchange rate immediately fell sharply. The episode — concurrent with the UK's Black Wednesday — reshaped European monetary politics and led to Sweden's eventual ERM opt-out.

Sveriges Riksbank — The World's Oldest Central Bank

Sveriges Riksbank, founded in 1668, is the world's oldest central bank and one of the most historically influential. It was the first central bank to introduce an inflation target in 1993, setting the precedent adopted later by the Bank of England, the Federal Reserve, and others.

The Riksbank has been a pioneer in unconventional monetary policy: it became the world's first central bank to introduce a negative policy rate in July 2009 (briefly), and again from 2015 to 2022 — a period during which the repo rate fell as low as −0.5%. This experiment, designed to stimulate borrowing and spending, influenced central banks worldwide.

The Riksbank also oversees Sweden's payments infrastructure and has been a global leader in central bank digital currency (CBDC) research. Its e-krona pilot, launched in 2020, was one of the first serious CBDC experiments by a developed-economy central bank, driven by Sweden's dramatic shift away from cash — one of the fastest in the world.

Key Facts

• Cashless society leader — Sweden is among the world's most cashless societies. Cash transactions are estimated at less than 10% of all payments, and many shops, cafes, and even churches only accept cards or Swish (Sweden's mobile payment app).
• Nobel Prize banknotes — Swedish banknotes feature Nobel Prize laureates and cultural icons: Astrid Lindgren (20 kr), Evert Taube (50 kr), Ingmar Bergman (200 kr), Dag Hammarskjöld (500 kr), and Selma Lagerlöf (1,000 kr).
• 500% interest rate (1992) — Sweden's one-day 500% overnight rate remains one of the most extraordinary monetary policy interventions in modern history.
• Öre discontinued — the 1 and 2 öre coins were discontinued in 1972; 5 and 10 öre in 1992; the 50 öre coin in 2010. Prices are rounded to the nearest krona.
• Euro opt-out — Sweden has a legal obligation to join the euro as an EU member, but has informally opted out by not fulfilling the ERM II requirement — a status tolerated by the EU.
• World's first inflation target — the Riksbank's 1993 inflation target of 2% CPI tolerance was a global first, now standard among major central banks.

See also: NOK – Norwegian Krone · EUR – Euro · Guide