The kuna is the official currency of the Republic of Croatia. It is a decimal currency that can be subdivided into 100 lipa. The word kuna comes from the Croatian word for marten, a small mammal in the weasel family that is found throughout Europe. Marten pelts were commonly used for trading in medieval Croatia. The word for the subunit lipa comes from the Croatian word for the linden tree. The kuna is issued by the Croatian National Bank.
The kuna originated in Croatia because of the value given to the marten pelts collected in the area. In addition to the name of the currency being derived from the marten, the Croatian word for tax, martunina, is derived from the Latin word for marten. The kuna evolved into an official silver-based currency in some areas by the 15th century. The Croatian kuna nearly came into existence in 1939 as the currency of the Banovina of Croatia under the Yugoslavian Monarchy. However, it was delayed by the formation of the Independent State of Croatia, which created the first Croatian kuna in 1941. Shortly thereafter, in 1945, the Independent State of Croatia kuna was replaced by the Yugoslavian dinar.
When Croatia gained independence in 1992, the Croatian dinar was used as a transitional currency until 1994. The kuna was originally pegged to the German Mark, but today, the euro is used as a reference currency. The Croatian National Bank was established in 1990 in preparation for independence. It was given constitutional authority in 1997, and expanded duties and autonomy were granted in 2001 and 2006. The objective of the bank is to maintain price stability without prejudice and to support the economic policy of the country.
The Croatian kuna is circulated through both coins and banknotes. Current denominations of coins in circulation are 1, 2, 5, 10, 20 and 50 lipa and 1, 2, and 5 kuna. Although the 1 and 2-lipa coins are rarely used, the National Bank has stated it has no plans to officially withdraw them from circulation. Banknotes are issued in denominations of 5, 10, 20, 50, 100, 200, 500 and 1000 kuna.
The economy of Croatia is primarily agricultural, but industrial goods make up 97 percent of the country’s exports. New products and manufacturing processes have helped to increase production. The economy of Croatia is only expected to improve due to the fact that negotiations for accession into the European Union were finalized in June 2011, and accession is expected to be fully ratified by 2013.