The Estonian Kroon (EEK) was the official currency of Estonia, a country located in Northern Europe, from 1992 until 2011.
The Kroon was reintroduced in 1992, replacing the Soviet Ruble, when Estonia gained independence from the Soviet Union.
The Bank of Estonia (Eesti Pank) was responsible for issuing and managing the Estonian Kroon.
Currency Replacement
On January 1, 2011, Estonia joined the Eurozone, and the Euro (EUR) replaced the Estonian Kroon as the country’s official currency.
This change was made to facilitate trade, attract foreign investment, and promote economic stability within the Eurozone.
The fixed exchange rate for the conversion of Kroon to Euro was set at 1 EUR = 15.6466 EEK.
The Estonian Kroon was removed from circulation, and all financial transactions are now conducted in Euros.
The Bank of Estonia continues to manage the country’s monetary policy and financial system as part of the European Central Bank system.
Exchange Rate System and Denominations
Before being replaced by the Euro, the Estonian Kroon operated under a fixed exchange rate system, with its value pegged to the German Mark initially, and later to the Euro.
The Kroon was subdivided into 100 smaller units called senti.
Coins were issued in denominations of 5, 10, 20, and 50 senti, as well as 1 and 5 Krooni.
Banknotes were available in denominations of 1, 2, 5, 10, 25, 50, 100, and 500 Krooni.
Economy and Challenges
Since adopting the Euro, Estonia has experienced some economic benefits, such as increased foreign investment, easier access to international markets, and lower borrowing costs.
However, the country still faces various economic challenges, including high levels of income inequality, a declining population due to emigration, and a need for further structural reforms.
Estonia’s economy is diverse, with significant contributions from various sectors, including information technology, manufacturing, and renewable energy.
Summary
In summary, the Estonian Kroon was the official currency of Estonia until 2011 when it was replaced by the Euro as the country joined the Eurozone.
The Kroon operated under a fixed exchange rate system and was subdivided into senti, with various banknote and coin denominations.
Despite the adoption of the Euro, Estonia continues to face economic challenges related to income inequality, population decline, and the need for further structural reforms.