A new, upgraded 500 króna banknote will be issued today, Monday, October 17, 2005. The new banknote is essentially the same as its predecessor but incorporates a number of modifications for improved security. It is easier to recognise and more difficult to counterfeit. The version that it replaces will remain legal tender but gradually be withdrawn from circulation.

Modifications to the banknote’s appearance involve replacement of the white margin on the earlier notes with all-over lithographic printing, and the addition of one visible security feature: a multicoloured metallic security thread. The new note incorporates a watermarked “cornerstone” which makes the corners stiffer and less likely to become folded. A fluorescent print has been added to the design, visible only in ultraviolet light. Further security features incorporated into the note can only be detected electronically. The original 500 króna note was designed by Kristín Þorkelsdóttir, who also took part in its redesign, and Stephen A. Fairbairn. It is printed by De La Rue plc of England.

Just over 1.8 million of the earlier notes are presently in circulation. It was decided to add the new security features and bring the design into line with that of the 5,000, 2,000 kr. and 1,000 notes as the time for reprinting approached. The first print run of the new version is eight million notes. The average lifetime of a 500 kr. note has been 11 months. The older design will thus largely have been replaced within roughly one year.

The security features of the new 500 kr. note are described on the Central Bank of Iceland website (www.sedlabanki.is) along with a variety of information about Icelandic banknotes and coin, past and present.

For further information, please contact the Governors of the Central Bank of Iceland or Tryggvi Pálsson, Director of the Financial Stability Department, tel. (+354) 569 9600.

No. 31/2005

October 17, 2005