Historical Sketch

The state history of Spain dates back to the early Middle Ages. In 1468, the dynasties of Castile and Aragon united and formed the basis of the entire state. In 1492, the last Moorish emirate was crushed. The Spanish monarchy existed, with two short interruptions in the 19th century, until 1931, when the Spanish Republic was established. A Nationalist uprising in 1936 triggered a civil war, in which the Nationalists finally prevailed in 1939. The subsequent authoritarian regime was tailored for the "Caudillo", Francisco Franco, who nominally restored the monarchy in 1947, with himself as regent for the vacant throne. After Franco's death in 1975, a new king ascended the throne, and Spain began its development towards democracy.

Monetary History Overview

The Spanish economy had been based on silver since the Middle Ages. The Castilian Real in silver became the principal accounting unit in 1497. In 1772, the Spanish coinage system was thoroughly reformed. The Spanish Real was now a bimetallic currency, the gold-to-silver ratio got fixed for the first time. The gold weights saw a slight reduction in 1786. The 1772 reform also abolished the distinction between specie coinage (Spanish: "de plata") and current coinage (Spanish: "de vellón") that had been introduced in 1686 to distinguish between full valued and debased coins. The two denominations were used concurrently afterward, since the Thaler-sized silver coin contained either 8 Reals "de plata" (favoured in colonial America) or 20 Reals "de vellón" (gradually favoured in mainland Spain). In 1848, the monetary system was modernized. The gold-to-silver ratio got lowered, but still remained higher than in neighbouring France, the "de plata" denominations of the silver coins were abolished for good, and the subsidiary copper coinage became decimal. Six years later, in 1854, the gold weights were reduced further such that the difference to the French bimetallic standard became negligible. In 1864 finally, a redenomination took place, with the Spanish Escudo at 10 Reals becoming the new accounting and currency unit. Spain did not join the Latin Monetary Union of 1865. However, in 1868 a monetary law was passed to adopt its monetary standard. The Spanish Peseta was introduced accordingly in 1869, the withdrawal of the former currencies proved to be more difficult than expected and dragged on until 1875. In 1874, the Bank of Spain began operations as central bank, the private paper money that had been issued since the mid-19th century disappeared. The new paper money quickly dominated the payment transactions and became inconvertible already in 1883. For the next sixty years, the Spanish currency remained unstable and inconvertible. During the civil war, the different factions used competing moneys. After the Second World War, Spain did not join the Bretton-Woods system of fixed exchange rates and continued with a multitude of specialized exchange rates. In 1958 finally, Spain joined the International Monetary Fund and pegged the Peseta to the US Dollar in the following year. In 1967, a 14% devaluation was carried out, and after the floating of the exchange rate in 1974, the Peseta gradually lost value. In the 1990s, Spain joined the European currency system and became a founding member of the European Monetary Union. It has introduced the European Euro in 1999, and the Spanish banknotes and coins were withdrawn in 2002.

Spain joined the International Monetary Fund (IMF) on 15.09.1958.

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Monetary History Sources