Historical Sketch

During the Great Nordic War of the early 18th, the Baltic came under Russian rule. In the First World War, Germany occupied the territory, which triggered the break away and subsequent independence of Estonia, Latvia, and Lithuania in 1918. It lasted only up to World War II. In 1940, the three Baltic states were occupied and annexed by the USSR and in the following year by Germany, together with the entire western part of the Soviet Union, which incorporated them into the "Reichskommissariat Ostland" (Eastern Land). In 1944 finally, the Red Army drove out the Germans, and Estonia, Latvia, and Lithuania became Soviet republics within the USSR again. During the decay of the Soviet Union in 1990, Estonia began to build state structures, and after a referendum in March 1991, the restoration of the independent Republic of Estonia was declared.

Monetary History Overview

During First World War occupation of Russian territories in Poland and the Baltic States, the German military authorities for the "Territory of the Supreme Commander for the East" (Gebiet des Oberbefehlshabers Ost) mandated the Credit Bank for the East (Darlehnskasse Ost) in Poznan, Poland, with the issuance of banknotes in German Reichsmark. The usage of the so-called "East Mark" (Ost-Mark) was restricted to the occupied territories, and the notes were not convertible. Banknotes were also issued in Ruble denominations at half a Reichsmark, referred to as "East Ruble" (Ost-Rubel).

In 1918, Estonia declared independence from Russia. In November, the government decided the immediate separation from the inflationary Russian currency area. The Estonian Mark was initially equal to the Finnish Mark, but quickly depreciated as the money issuance was proliferating. The Bank of Estonia began operations in March 1919, but money was also issued by the government and by local authorities in the form of emergency issues. Inflation was stopped in mid-1924 when the Mark got pegged to the Pound Sterling. In 1928, two zeros were cut, and the 1st Estonian Crown became the new currency unit. The Sterling peg was kept unchanged and remained in place until the Soviet annexation of the Baltic states in 1940. The Soviet Ruble was introduced more or less at par with the Crown, and the Estonian currency got abolished in March 1941.

In 1991, Estonia attained (second) independence. In June 1992, the 2nd Estonian Crown was created as national currency pegged to the German Mark. The Bank of Estonia had already been re-established in 1990 when the State Bank of the USSR got nationalized. In 2011, Estonia joined the European Monetary Union and introduced the European Euro. The Estonian banknotes and coins were withdrawn in within two weeks.

Estonia joined the International Monetary Fund (IMF) on 26.05.1992.

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