The Czech Republic uses the Czech koruna, also known as the Czech crown. The koruna has been the official currency since 1993 when the Czech Republic became an independent country after the dissolution of Czechoslovakia.
The Czech koruna is one of the European Union’s eight currencies, and while the Czech Republic is legally bound to adopt the euro in the future, there is currently no set timeline for this transition.
This article explores the history and current state of the Czech koruna, the official currency of the Czech Republic. It covers the koruna’s inception following the dissolution of Czechoslovakia and examines its role in the Czech economy, including its interactions with the European Union.
Historical Journey of the Czech Koruna
The Czech koruna’s history is closely tied to the Czech Republic’s political and economic journey.
Originating after the 1989 Velvet Revolution and the 1993 dissolution of Czechoslovakia, the koruna replaced the Czechoslovak crown while incorporating new designs, including the iconic lion of Bohemia on its highest denomination.
The currency faced initial challenges with devaluation in the 1990s but soon stabilized, becoming a symbol of the nation’s economic success and attracting foreign investment.
Despite joining the EU in 2004, the Czech Republic has not yet adopted the euro, with debates ongoing about the potential benefits of economic integration versus the risks to monetary sovereignty and economic flexibility.
The koruna’s story goes beyond economic data, embodying the Czech people’s aspirations and challenges in the post-communist era and European integration.
The Czech National Bank manages the koruna, which is divided into 100 haléřů, although these smaller denominations are no longer used. In recent years, the koruna has maintained relative stability against the euro, reflecting the country’s resilient and adaptable economy.
The koruna’s journey is not just about financial transactions but also represents the Czech Republic’s identity and ongoing quest for a secure and prosperous future.
History of Coins
The Czech koruna features a range of coins introduced in 1993 with denominations of 10, 20, and 50 haléřů, and 1, 2, 5, 10, 20, and 50 Kč. The lower haléřů coins were phased out due to low purchasing power, but prices still show 1-haléř accuracy, with cash transactions rounded to the nearest integer.
In 2000, 10 Kč and 20 Kč coins were minted with special designs for the millennium. Initially minted abroad, production later moved to the Czech Republic.
The coins increase in size and weight with value, and feature designs like the Czech lion and historical figures. Collector sets and commemorative coins, including silver and gold, are also issued.
The coins’ designs include elements like the St. Wenceslas crown, Charles Bridge, and historical monuments, reflecting Czech culture and history. The 50 Kč coin notably features a dual composition and a design highlighting Prague.
These coins symbolize various aspects of Czech heritage and are an integral part of the nation’s currency system.
History of Bills
The Czech koruna has a diverse range of banknotes, each with its unique history and design. Initially, in 1993, Czechoslovak notes with adhesive stamps were used, with denominations of 100, 500, and 1,000 Kčs being overstamped.
Later in the same year, a new series was introduced in denominations of 20, 50, 100, 200, 500, 1,000, 2,000, and 5,000 Kč, designed by Oldřich Kulhánek. These notes featured prominent Czech personalities and have undergone various upgrades for security features.
In 2007, upgraded notes with advanced security features like color-shifting threads and additional watermarks were introduced, starting with the 2,000 Kč note.
The Czech National Bank also issued commemorative banknotes in various designs and colors, celebrating significant Czech figures and landmarks. These banknotes are not only a means of transaction but also reflect the rich cultural and historical heritage of the Czech Republic.
Inflation and Buying Power of The Czech koruna
Inflation has been a major issue for the Czech Republic in the past. In the 1990s, inflation rates reached as high as 1000%. However, since the introduction of the koruna, inflation has been relatively stable, with rates hovering around 2-3%. The buying power of the koruna has also remained relatively stable, with prices for goods and services remaining affordable for the average citizen.
The inflation rate in the Czech Republic has been relatively stable over the past few years. According to the World Bank and OECD, the average inflation rate was 4.68% per year between 1992 and 2023. This has produced a cumulative price increase of 312.31%. This means that today’s prices are 4.12 times as high as average prices since 1992.
Inflation has had a significant impact on the purchasing power of the Czech koruna. The inflation rate in the Czech Republic between 1992 and 2022 was 270.56%, which translates into a total increase of Kč270.56. This means that 100 korunas in 1992 are equivalent to 370.56 korunas in 2022.
The Czech National Bank has been working to maintain stable prices and low inflation. The bank’s inflation target is 2%, and it has been successful in keeping inflation within this range in recent years. This has helped to maintain the purchasing power of the Czech koruna.
Czech Koruna
100 Kč
The 100 Kč colored turquoise features Karel IV (The Czech, Holy Roman Emperor) and the Seal of Charles University in Prague on the reverse.
200 Kč
The 200 Kč colored orange features Jan Ámos Komenský (Czech educator and Theologian) on the obverse and Hands, stylized open book at bottom right on the reverse.
500 Kč
The 500 Kč colored brown features the brown and pink banknote with Božena Němcová and rose on the obverse and the laureate woman symbolizing all woman characters in Němcová’s books on the reverse.
1,000 Kč
The 1,000 Kč colored violet features František Palacký and uprooted tree on the obverse and an Eagle spread its wings over the Archbishop’s Castle in Kroměříž on the reverse.
2,000 Kč
The 2,000 Kč colored green features Czech opera singer Ema Destinnová, Lyre, Laurels on the obverse and Head of Muse of music with cello and violin surrounded by laurels, Coat of arms, Lyre on the reverse.
5,000 Kč
The 5,000 Kč colored grey features Tomáš Garrigue Masaryk at the right, a wreath in the center on the obverse, and Buildings in Prague, Czech coat of arms on the reverse.
Currency Usage in the Czech Republic
In the Czech Republic, the official currency is the Czech koruna (Kč), which remains in use despite the country’s EU membership. Kč is essential for daily transactions, especially for smaller purchases like groceries and public transport tickets.
Credit and debit card use is on the rise, particularly for larger expenses, with Mastercard and Visa widely accepted and contactless payments becoming popular. In major cities like Prague, some establishments prefer cashless payments for convenience.
Tipping around 10% is customary in restaurants, bars, and taxis. Kč is easily accessible via ATMs and currency exchange offices, though exchange fees should be considered.
Banknotes are available in denominations of 100 to 5,000 Kč, and coins range from 1 to 50 Kč, with smaller coins being less commonly used. The future of Kč in the context of adopting the euro is debated, balancing European integration with national identity and economic stability.
For tourists, it’s important to note that while euros might be accepted in some tourist areas, Kč is generally preferred, and prices are usually fixed without bargaining. Be aware of potential currency conversion fees when using foreign cards.
Understanding Kč usage will enhance your experience in the Czech Republic, ensuring smooth financial transactions during your visit.
Does Czech Accept the Euro?
While the Czech Republic is a member of the European Union, it does not use the euro as its currency. Therefore, the euro is not accepted as a valid currency in the Czech Republic. You will need to exchange your euros for Czech crowns if you plan to use cash.
Is USD accepted in Czech?
In the Czech Republic, while US dollars are not widely accepted as the official currency Czech korunas (Kč), there are limited scenarios where USD might be used.
In tourist areas, particularly those frequented by American visitors, some places might accept USD for larger purchases or tours, but the exchange rates may not be favorable.
High-end hotels and restaurants, especially in Prague, may accept USD, but it’s not a common practice.
It’s best to use Czech korunas for most transactions due to their wide acceptance and better exchange rates. Exchanging USD to Kč in advance generally offers more competitive rates than on-the-spot conversions at establishments.
Exchanging Currency in the Czech Republic
Exchanging currency in the Czech Republic is straightforward if you know the right places. Official exchange offices, identified by the Czech National Bank (ČNB) logo, are reliable and offer fair rates without hidden fees. These are found in major cities and tourist areas.
When visiting, carry your passport and the currency you wish to exchange. ATMs are a convenient option, widely available and typically offering competitive rates, though your bank may charge additional fees.
Where can I exchange Czech Currency?
To get the best exchange rates, it is recommended to exchange currency at banks. Look for an ATM of a reputable bank, such as KBC, Erste, Société Génerale/Komerční Banka, UniCredit, Česká Spořitelna, AirBank, Mbank, Equa Bank, Raiffeisen, etc.
You can also exchange currency at exchange offices, which are located throughout the city. Komercni Banka in the Czech Republic has three convenient Prague locations with ATMs that accept Visa, MasterCard, and American Express. The exchange offices are open Monday to Friday from 8 am to 5 pm, but the ATMs are accessible 24 hours.
What to know before exchanging currency in Czech
Before exchanging currency in Czech, it is important to know the current exchange rate. You can check the exchange rates online or at exchange offices. Keep in mind that exchange rates at airports and tourist areas are often less favorable than rates at banks and exchange offices.
Choose licensed exchange bureaus regulated by the Czech National Bank for competitive rates and transparent fees. These are commonly found in tourist areas and city centers. Always compare rates at different bureaus to get the best deal.
Major banks like Česká spořitelna offer currency exchange services, but their rates might not be as competitive as dedicated bureaus.
Using ATMs to withdraw cash with your debit or credit card is convenient, but be aware of potential foreign transaction fees from your bank.
Additional tips for a smooth exchange experience include avoiding street vendors and unlicensed money changers to prevent scams or unfair rates. Always inquire about any extra fees or commissions at exchange bureaus.
Lastly, keep your receipt for any currency exchanges as proof of transaction. Be cautious of street vendors offering seemingly better exchange rates, as these can be scams.
Cost of Living in the Czech Republic
If you are planning to move to the Czech Republic, you might be wondering how cheap it is to live there. According to Expatistan, the cost of living in the Czech Republic is cheaper than in 51% of countries in the world. A single person’s estimated monthly costs are $2,086 (46,564 Kč), which includes rent. However, Numbeo estimates that the cost of living in the Czech Republic is, on average, 31.8% lower than in the United States.
It is important to note that the cost of living in the Czech Republic can vary depending on where you live. For example, living in Prague can be more expensive than living in other parts of the country. It is recommended that you research the cost of living in the specific area you plan to live in to get a more accurate estimate.
It is also important to note that the cost of living in the Czech Republic can affect your salary. While the cost of living is generally lower than in other countries, it is still important to ensure that your salary is enough to cover your expenses and provide a comfortable standard of living.
Overall, the Czech Republic can be a relatively affordable country to live in, with a lower cost of living and a reasonable average salary. However, it is important to do your research and ensure that you have a good understanding of the cost of living and salaries in the specific area you plan to live and work in.
Choosing Between USD and Czech Currency
If you are traveling to the Czech Republic, you may be wondering whether to bring US dollars or exchange them for Czech currency. Here are some factors to consider when making your decision.
Exchange Rate
While some places might accept USD, it is generally recommended to use Czech koruna for transactions in the Czech Republic. This is because you will get a better exchange rate and avoid potential confusion and inconvenience. You can exchange your foreign currency for Czech koruna at banks, exchange offices, or ATMs. It is advisable to compare exchange rates and fees before making a transaction.
Convenience
While some businesses in the Czech Republic may accept US dollars, it is generally more convenient to have Czech currency. You can exchange your dollars at currency exchange offices, banks, or ATMs. ATMs are widely available and usually offer a favorable exchange rate. However, it is important to check with your bank beforehand to see if there are any international transaction fees.
Consider also using credit or debit cards for larger expenses, as Visa and Mastercard are widely accepted. ATMs are readily available for withdrawing Kč using bank cards. Euros may also be more widely accepted than USD, especially in tourist areas.
To avoid any issues, exchange your USD to Kč before traveling or withdraw Kč from an ATM upon arrival in the Czech Republic. This preparation will ensure you have the necessary local currency for your expenses.
Fees
When exchanging currency, be aware that there may be fees involved. Currency exchange offices and banks may charge a commission or fee for exchanging your dollars for Czech currency. Additionally, some ATMs may charge a fee for international transactions. It is important to check the fees beforehand to avoid any surprises.
Tips
When deciding between using USD and Czech currency in the Czech Republic, it’s advisable to carry Czech currency (koruna) for small purchases and tips. If you plan to use a credit card, inform your bank in advance to prevent issues with international transactions. Be mindful of the exchange rate and any fees when converting currency.
Using ATMs can provide favorable exchange rates, but it’s important to check with your bank about potential international transaction fees to avoid unexpected charges. These tips will help ensure smooth financial transactions during your visit.
By considering these factors, you can make an informed decision on whether to bring US dollars or exchange them for Czech currency.
Don’t Get Scammed Tips
When traveling to the Czech Republic, it’s important to be aware of common scams that target tourists.
- Use licensed exchange bureaus with clear signage and displayed rates. Opt for well-lit ATMs for cash withdrawals and inform your bank about your travel. Prefer contactless card payments for smaller transactions and monitor your cards and receipts.
- Book stays with good reviews and clear policies. Research safe and lively neighborhoods. And store valuables in hotel safes or secure bags.
- Use official taxis and be aware of pickpockets in public transport. Buy transport tickets from authorized booths and keep them validated. Stay alert while walking or cycling, especially at night.
- When exchanging money or using cash in the country, it’s important to verify that the currency is valid and not counterfeit. All Czech banknotes feature a watermark of the portrait on the front of the note. Hold the note up to the light to see the watermark.
- One common scam involves a stranger approaching you on the street and asking for help with directions or a language barrier. They may then ask for money or try to pickpocket you while you’re distracted. To avoid this, always be cautious of strangers and keep your belongings close to you.
By adhering to these tips and employing common sense, you’ll enhance your safety and enjoyment in the Czech Republic, a country known for its hospitality and beauty.
