Traveler's Guide to Icelandic Currency

When you touch down on our fair shores, you’ll be blown away by the sheer beauty of your surroundings. Where else can you find volcanoes, glaciers, waterfalls, hot springs, and fjords all together? And at some point during your journey, you’re going to need money. One of the cool things about travel is discovering how things differ from what you’re used to back home. Icelandic currency is no different.

We think our money is quite beautiful, but maybe we’re a bit biased. I do know several tourists who have kept spare bills from their trip as a souvenir, so maybe I’m not alone. For those who disagree, you can always reverse exchange your Icelandic króna to USD at any rate, let’s look at all there is to know about this Icelandic currency. Use it to buy a nice bowl of seafood soup or a whale-watching excursion during your trip to Iceland, if you please.

What is the Currency in Iceland?

Icelandic króna is actually quite pretty when you look at them. They feature political, historical, and artistic figures like politician kr, and on financial markets its code is ISK. So look for króna (ISK) when exchanging money. At this time, the króna is not at its strongest point. It has slightly fallen in value since November 2018. Icelandic króna is not a weak currency, but if you take a trip now, the exchange will be cheaper than it was in the fall.

It’s a common misconception that Iceland uses the Euro, but that’s not true. That being said, you may find some tourist attractions, bars, and restaurants that accept foreign currencies. You might even be able to get away with using Euros, Canadian or US dollars, and some Scandinavian currencies. If you’ve got some Norwegian, Swedish, or Danish bills or coins floating around, see if you can use them.

What Does the Money in Iceland Look Like?

Like most world currencies, Icelandic money comes in different sizes and colors to denote their value. This comes as a surprise to many Americans traveling abroad for the first time. Anyone who has seen American money knows the different denominations of the famous greenback are all the same shade with identical dimensions.

Icelandic króna is actually quite pretty when you look at them. They feature political, historical, and artistic figures like politician Jón Sigurðsson, scholar Árni Magnússon, and painter Jóhannes Kjarval. As the official currency of Iceland, it’s natural that we want each króna to pay tribute to our proud history. The banknotes themselves are shades of blue, brown, green, red, purple, with some multicolored notes. The bill denominations are 10, 50, 100, 500, 1,000, 2,000, 5,000, and 10,000 króna.

What’s the Exchange Rate For Icelandic Króna to USD?

Just to give you an idea of how much dollars are worth, let’s look at the exchange rate of Iceland currency to USD. One dollar is worth about 120 ISK at the moment. The exchange rate for ISK to USD is currently 100 króna for around 83 cents. So for every thousand ISK you spend, it’s about $8.30. This should help you with the mental conversion of Iceland currency to USD while shopping or comparing prices on hotels, car rental, and other travel necessities.

And of course, if you’re helpless at math, just download a currency converter app to your phone before boarding the plane. When converting Icelandic króna to USD, rates can fluctuate but not too wildly. In the past year, the ISK to USD range has been between 98 and 125 ISK for one US dollar.

Who Issues Iceland Currency?

Iceland currency is overseen by the Bank of Iceland. This is the country’s central bank and is an independent financial institution owned by the government. The reserve bank in Iceland is the Icelandic equivalent of the Federal Reserve or the Bank of England. They are responsible for the bills in circulation, printing new money, and destroying old or damaged notes. Like most governmental institutions, the bank's headquarters are in the capital city of Reykjavik.

Do I Need to Exchange Currency When Traveling to Iceland?

During your trip to Iceland, you actually might not need to pay a visit to the exchange bureau. While it never hurts to carry a little cash on you, most establishments will accept credit cards or your debit card. It’s nice to have Iceland currency in your wallet for those unexpected clothes, souvenirs, and other little knick-knacks that you might want to pick up along the way. But for most of your purchases, you don’t need to have actual króna currency in your pocket.

Even though cards are accepted in lieu of Iceland currency just about everywhere, there’s something important to know. If you are filling up your tank at a gas station, you’ll need to have your PIN when paying by credit card. Many people don’t know theirs, so be sure to contact your credit company a few weeks before you travel. You’ll receive it in the mail, so allow plenty of time for it to arrive.

How do I Exchange Money in Iceland?

If you decide that you would like to carry a little bit of money around, you can always convert your USD to Iceland currency. There are several ways to do this. First, you can go to your bank before your trip and order Icelandic money. This is a convenient and because banks offer very competitive exchange rates. They usually don’t charge a commission the way exchange places do.

Another thing you can do is go to the official exchange offices that you see at the airport. Be wary of this though, as they make their money by charging you extra. What I personally do when I travel is take money out of the ATM. I get a good rate, and I can always take more out later. Just be sure to check that your bank doesn’t charge for this service; you don’t want any surprise fees!

What About Tax-Free Shopping?

One of the benefits for foreign visitors traveling in Iceland is that they can take advantage of tax-free shopping. We’re part of the European Free Trade Association (EFTA) and the European Economic Area (EEA). This means that we charge VAT (value-added tax) and it’s already included in the price of items you buy. If you’d like to get a refund for the 24% tax on your items, you’ll need to follow a few steps.

The minimum for a VAT refund in Iceland is a purchase of 6.000 ISK. When you buy something, ask at the store for a tax-free form with your original purchase receipts. Their signature must be on this form. This is your tax-free receipt, and you’ll need to get it validated at Arion Bank in the international airport. Once you’ve got it stamped, head to the International Refund Point at Keflavik.

Be sure you check the value of your items before heading to the airport. If the items you are exporting are over 100.000 ISK, you need to get your form validated at customs.

Guide to Icelandic Currency for Travelers

Now that you know everything there is to know about Icelandic currency, it's time to pack your suitcase and start spending. There are so many things to do in Iceland, the least of your concerns should be converting money. Have a great trip.