Monetary separation sealed split of Czechoslovakia ten years ago


Less than six weeks after Czechoslovakia split up on the 1st of January, 1993, two new currencies emerged, replacing the Czechoslovak crown which had existed since 1919. The two countries divided their monetary assets, liabilities and reserves according to a ratio of two to one in favour of the Czech Republic. After monetary separation was publicly announced, all payments between the two new countries stopped and border controls were stepped up to prevent transfers of cash. The new currencies became valid on February 8, ten years ago.

If nothing else during the break-up, monetary separation certainly did have an effect on every person in this country. The public was given a deadline in which to deposit old bills in bank accounts, so that they could be marked by a stamp making them valid in the new state. Coins and small denomination notes without stamps were still in use several months after the separation, accounting for only about three percent of the total money in circulation. Gradually, the stamped banknotes were replaced by brand new Czech and Slovak notes. In the Czech Republic the whole process was completed by the end of August 1993. For a short while the exchange rate of the Czech and Slovak crowns was 1:1, but after a few months the Slovak crown depreciated by ten percent. Today one Czech crown buys approximately 1.3 Slovak crowns.

There are almost 250 million banknotes and 2.4 billion coins in circulation in the country, their total weight being 5,000 metric tonnes. They were designed by graphic artist Oldrich Kulhanek and engraver Milos Ondracek, whose fifty-crown coin received the international "Coin of the Year award" in 1993. The banknotes in eight different denominations feature, for example, King Charles IV, writer Bozena Nemcova, opera singer Ema Destinnova or the first president of Czechoslovakia Tomas Garrigue Masaryk. There will soon be only seven different values of coins instead of nine. The Czech National Bank decided to withdraw ten and twenty-heller coins from circulation because the production and transportation of one such coin costs more than is the actual value of the piece. With such small monetary value, the ten and twenty-heller coins do not circulate properly anymore - it has been counted that every Czech has around 120 of these coins hoarded up somewhere.

The Czech crown is celebrating its 10th anniversary these days but it is unlikely that it will survive another decade. After the Czech Republic's accession to the European Union, it will be replaced by the common European currency, according to some plans that could happen as early as in 2007.