Have you heard about the Czech koruna? It is the official legal tender for the Czech Republic. One koruna consists of 100 haléřů. As you know, the Czech Republic is part of the European Union (EU) and so is legally obliged to adopt the common euro currency eventually, even though this doesn’t appear to be imminent.
It is noteworthy that the word koruna derives from the word for “crown.”
It is noteworthy that the Czech koruna has been the official currency of the country for many years, more precisely since February 8, 1993, when it replaced the Czechoslovak koruna following the dissolution of Czechoslovakia into the independent Czech and Slovak republics.
Just remember that the Czech koruna and the Slovak koruna (SKK) both replaced the Czechoslovak koruna at par.
As a reminder, the Czech Republic joined the European Union in 2004 but has yet to adopt the euro as its official currency. The Czech Republic, however, continues preparations to join the common currency but doesn’t have an official target date to make the switch over from its currency.
In the beginning, it planned to adopt the euro as its official currency in 2012; however, the opposition stopped that move in a 2007 vote.
The country’s central bank, Czech National Bank, which is headquartered in Prague, currently issues and manages koruna. The Czech National Bank mints coins in 1, 2, 5, 10, 20 as well as 50 koruna denominations. It also issues banknotes for 100, 200, 500, 1,000, 2,000, as well as 5,000 koruna.
Koruna and the single currency
Importantly, reservations following the European debt crisis is one of the key factors behind opposition to the Czech Republic fully joining the Eurozone as well as adopting the euro as its currency.
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While the country is still expected to eventually adopt the euro, there has also been some talk about the Czech Republic leaving the European Union entirely in recent years.
For example, the media and some political analysts are using the terms ‘Czech-Out’ or ‘Czexit’ in order to describe a Czech version of Brexit or leaving the European Union entirely.
While current President Miloš Zeman doesn’t support the idea of leaving the European Union, Zeman stated that he is open to holding a referendum so people can again vote on the topic, mirroring the process taken by the United Kingdom several years ago.
Within the European Union, the Czech Republic enjoys a relatively strong economy with one of the highest Gross Domestic Product (GDP) growth rates as well as lowest unemployment rates, at about 2.9% in 2019. Interestingly, it has one of the lowest unemployment rates in the European Union.
We also have to mention that exports make up about 74.4 percent of the country’s GDP, and the challenges the country’s economy faces include diversifying from manufacturing, a lack of skilled workers, and an aging population.