Demand determines the amount of banknote printing
The Central Bank needs to meet the demand for banknotes and coins in society.
Individuals and companies withdraw cash from commercial banks or savings banks, e.g. at their ATMs, but banks and savings banks then withdraw the cash from the Central Bank.
The Central Bank prints banknotes and mints coins at regular intervals as it deems necessary, based on demand. Banknotes often become unusable after several years of use, so millions of banknotes are destroyed each year and replaced with new banknotes.
How and where are banknotes produced today?
The Central Bank estimates when new banknotes need to be printed based on the demand for banknotes.
The Central Bank has banknotes printed and coins minted by companies that specialise in this production. For almost a century, these companies have been located in the UK.
Why did we add a ten thousand krona note?
The purpose of issuing the banknote was to make payment processing in Iceland more agile and efficient by, among other things, reducing the number of banknotes in circulation.
When the ten thousand króna note was added to the Central Bank's banknote series in 2013, inflation over the previous decades had resulted in, among other things, the share of the five thousand króna note, which was the highest denomination at the time, exceeding 80% of the total value of the banknotes issued.
Constantly rising prices, i.e. long-term inflation, therefore call for banknotes or coins with a higher value.