Historical Sketch

The state tradition of Sweden dates to the 10th century. Between 1397 and 1523, the Kalmar Union united Sweden with Denmark-Norway, after its dissolution the state was reformed. In 1814, Norway left the dynastic Union with Denmark, and for almost a century, Swedish kings ruled there in a personal union. Since 1905, Sweden is a separate kingdom.

Monetary History Overview

In the mid-16th century, Sweden began issuing large silver coins modeled after the German Thalers, the name "Riksdaler" came into use in the early 17th century. The daily transactions were dominated by small silver and copper coins, against which the value of the Thaler fluctuated. In 1604, a fixed rate between the Thaler (specie) and the circulating coins was set, which was divided again in 1633, when all copper coins were devaluated by 50%. For one and a half centuries, Sweden had three currencies, where the specie Thaler was more like a reference rather than used in payments. In periods, either silver or copper was used primarily, and after 1718, a de facto bimetallism had established. During the copper-dominated period in the mid-17th century, copper bars with denominations up to 10 Thalers were issued, the so-called "plate money" was mainly used in distance trade rather than daily transaction and disappeared again in the 1690s. In 1662, the private Bank of Stockholm begann issuing paper money but quickly went default so that the government had to bail out the note owners. In consequence, the Bank of the Estates was founded as government bank in 1668, but after the experience with the Stockholm bank, paper money issuance was banned for the next 40 years.

To remedy the currency situation, a comprehensive reform was carried out end 1776. Beginning 1777, the copper currency was abolished as well as the distinction between specie and other silver. The coinage for the 1st Swedish Thaler (Riksdaler) was modernized, and the Estates' Bank issued paper money. The monetary situation began deteriorating again already in 1789, when during the Russian-Swedish Wars, the government issued money in ever increasing numbers via the National Debt Office. Since the Estates' Bank notes had remained stable against silver, a first attempt at remediation in 1803 only devalued the Debt Office notes. But in 1809, also the Estates' Bank notes became inconvertible, and Sweden had again three concurring currencies, silver and two paper. Remediation began in 1830 with a slight revision of the coinage and was concluded in September 1834, when the three currencies, referred to as "specie", "banco" (Riksbank notes) and "riksgälds" (Debt Office notes), were coupled at fixed ratios. As this proved successful the Swedish currency could finally be reformed. In 1856, the three currencies were abolished and replaced by the 2nd Swedish Thaler (Riksdaler), which was based on silver and had a decimal sub-unit. The Estates' Bank (later Riksbank) was given the monopoly for paper money. In December 1872, the three Scandinavian countries Denmark, Norway and Sweden concluded the Nordic Monetary Union that created a uniform gold standard. Beginning of 1875, Sweden introduced the Swedish Crown and demonetized the Thaler within three years. The Scandinavian currencies remained stable for the next 40 years. At the outbreak of the First World War, the gold parity was suspended everywhere, and the mutual acceptance of banknotes and coins ceased. The post-war recovery of the Swedish monetary system took until 1925 when the Scandinavian gold standard was re-instated. But the economic crisis of the early 1930s finished the gold standard for good. The Crown got first pegged to the Pound Sterling, then to the US Dollar in 1939. It remained stable through wartime. In 1949, the Crown was devalued in parallel with the Pound Sterling despite the nominal Dollar peg. In the following, Sweden directly pegged its currency to gold rather than foreign currencies, until the Crown got floated in 1973. In the late 1980s and 1990s, the Swedish currency lost some 40% against the European currency. Sweden did not join the European Monetary Union of 1995, a decision that was confirmed by the negative vote in the September 2003 referendum. After a longer period of currency stability, the Crown has started again to depreciate against the Euro in the late 2010s.

Sweden joined the International Monetary Fund (IMF) on 31.08.1951.

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