Historical Sketch

In the Russian-Swedish War Finland became part of the Russian Empire, which had been under Swedish rule for centuries. The Grand Principality (or Grand Duchy) of Finland was established in 1809 with the Russian czar as grand prince in personal union. After the Russian February Revolution of 1917, the grand princely throne remained vacant, and after the October Revolution of the same year, Finland declared independence. In 1919, after the end of the civil war, Finland became a republic.

Monetary History Overview

After Finland's incorporation in the Russian Empire in 1809, Russian accounting was introduced immediately. The Swedish currency remained tolerated until 1841. The Finnish Ruble was nominally identical to the Russian currency. A state-owned commercial bank began issuing paper money in 1812 which circulated alongside the Russian money. In 1841 the bank was renamed "Bank of Finland" and took over the central bank role. Twenty years later, the 1860 grand princely manifesto created the 1st Finnish Mark as national currency. It got introduced in July 1863, and the Russian paper money was demonetized until end 1865. Originally, the Mark was a silver currency, in 1878, it switched to the French gold standard. This remained unchanged until the outbreak of the First World War. In 1915, the gold standard got suspended, and the Mark strongly depreciated in the subsequent economic crisis. In December 1925, the currency got pegged to the Pound Sterling, and remained so when Britain left the gold standard in the early 1930s. During the Second World War, the economy went into decline. The Mark's exchange rate remained frozen but got devalued by more than 60% afterwards. The economic crisis continued for more than a decade, and the currency lost almost another 60% until the late 1950s, when finally, a stabilization set in. The currency was reformed in January 1963, two zeros were cut, and the 2nd Finnish Mark became the new unit. Another 24% devaluation was carried out in 1967, and the Mark remained stable afterwards. In 1973, the exchange rate was floated, and Finland subsequently adhered to the European currency system. It is a founding member of the European Monetary Union and has introduced the European Euro in 1999. The Finnish banknotes and coins were withdrawn in 2002.

Finland joined the International Monetary Fund (IMF) on 14.01.1948.

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