kuna_currency_used_in_Croatia

Croatian Currency Spotlight: Croatian Kuna

In Business and Currency by Continental StaffLeave a Comment

This week we’ll take a look at the currency used in Croatia, the Croatian kuna. Though Croatia plans to adopt the euro, the kuna will remain the official currency for the foreseeable future.

Fast Facts: Kuna

  • Kuna Symbol: kn
  • Croatia Currency Code: HRK
  • Coins: 1, 2, 5, 10, 20, 50 lipa, 1, 2, 5, 25 kn
  • Notes: 10, 20, 50, 100, 200, 500, 1000 kn
  • Croatian GDP (nominal): $59.911 billion
  • Central Bank: Croatian National Bank

History: Currency Used in Croatia

The word ‘kuna’ dates back to Roman times. In nearby provinces, Roman taxes were collected in marten skins. The Croatian word for tax is “marturina” which is derived from the Latin “martus” – or “kuna” in Croatian. Currency under the name of the kuna was even used in Slavic countries and kingdoms such as Kievan Rus throughout much of the late Middle Ages. The currency used in Croatia itself was a hodgepodge of foreign money, along with some of its own currency, before falling under more direct Austro-Hungarian influence.

The idea of the kuna resurfaced around the beginning of World War II under the Banovina of Croatia. When the fascist Ustaše came to power in 1941, they started using the Independent State of Croatia kuna. Following their defeat at the end of WWII Croatia was amalgamated into Yugoslavia under Tito and the Yugoslav dinar became the official currency for the entire region.

It wasn’t until 1991 that Croatian currency would be its own once again. This began with the Croatian dinar but later transitioned to the Croatian kuna on December 31, 1994 as the war against Yugoslav forces was coming to an end. Using the name ‘kuna’ was initially controversial as it was used by the NDH (Independent State of Croatia). Other names such as ‘kruna’ (crown) were considered but ultimately the transition was smooth.

When the kuna was first reintroduced it was pegged to the German (Deutsche) mark. After the Deutsche Mark was replaced by the euro, the new pan-European currency became the peg for the kuna. Croatia joined the EU on July 1, 2013 and is obligated to join the European Monetary System – which it plans on doing in the future. Croatia has to be a member of ERM II for two years before it can adopt the euro, however the country still needs to reduce its budget deficit. Initially, it was expected that it would take about 2-3 years for Croatia to adopt the euro, but has been delayed by ongoing economic problems both in Europe and Croatia. The ECB is expecting Croatia to join the ERM II around 2016 and adopt the euro in 2019 at the earliest – though this is subject to change.

Notes and Coins: The kuna

All kuna notes feature a portrait of a famous Croatian on the front and various examples of Croatian architectural landmarks on the reverse. Some of the people featured include politician Stjepan Radić, poet Ivan Gundulić, and bishop Juraj Dobrila. Among the famous architectural landmarks are the Old City of Dubrovnik, Diocletian’s Palace in Split, Pula Arena, and many others. Among the denominations previously listed, the 1000 kn bill is rarely used.

Coins are issued in two different versions. Coins from odd numbered years have the name of the featured plant or animal in Croatian while even numbered ones are in Latin. A Grapevine, an olive branch, a tobacco plant, a brown bear, and a tuna are among some of the decals featured on the coins. Though 1 and 2 lp (lipa) coins are rarely used, they are still in circulation, along with the high value 25 kn coin.

Value: HRK per EUR

The HRK is most closely linked with the EUR due to its peg. Realistically, Croatia does not have a fully independent monetary policy because of this. While the value of the HRK per EUR has remained relatively constant since 2003, there is some fluctuation. The highest value the HRK reached was 7.1048 HRK per EUR on September 12, 2008. The lowest value was 7.7262 HRK per EUR on Feb 12, 2015.

At the time of writing the value was 7.5989 HRK per 1 EUR

HRK_per_EUR_currency_used_in_Croatia

HRK per 1 EUR over the past year

At the time of writing the value was 6.7791 HRK per 1 USD

At the time of writing the value was 5.5969 HRK per 1 CAD

Croatian Economy

After the collapse of Yugoslavia, Croatia transitioned from socialism to a free market economy over the course of the 1990’s. Despite the devastating 1991-95 war, Croatia’s economy was able to improve greatly, growing at a rate of 4-5% per year throughout the 2000’s. However, the Global Financial Crisis as well as the long process of joining the EU and adopting the euro has hurt the economy greatly, resulting in 6 years of recession.

The service sector is the largest in the Croatian economy, as it is worth about 70% of the country’s total GDP. Tourism especially is a huge part of the economy during the summer and increasingly the winter as well. However, over reliance on tourism can have negative effects – when visitors are sparse the economy suffers a visible downturn. In the industrial sector (27% GDP), food processing and the chemical industry are the biggest exporters. Agriculture meanwhile makes up approximately 6% of Croatia’s GDP and includes the export of blue water fish, olive oils, organic foods, wines, and lavender.

tourism_currency_used_in_Croatia

Final Thoughts

The dominating currency story out of Croatia over the next several years will be the continued process of adopting the euro. For now though, the Croatian currency is the kuna and the value will generally fluctuate within a limited range against the euro. The Croatian economy has certainly made great strides over the last couple decades, but recent troubles have stunted growth. Still, the recession is due to end this year, and gradual GDP growth should be seen over the coming years.

For more information about the euro, click here. For a broader understanding of Croatian history and culture check out our Country of the Week profile. For information about traveling to Croatia then be sure to follow our Travel Guide.

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