FINLAND (1963-2002) - Finnish markka reformed [FIM]

1 markka = 100 penniä

As a result of inflation pressure in Finland, a monetary reform was introduced. On January 1, 1963 a reformed Finnish markka [FIM] was put into circulation. New markka was worth 100 old markkaa [FIN] and at the moment of exchange it was convertible into American dollars [USD] in ratio 3.2 FIM for 1 USD. Inflation, however, was not stopped and in 1967 the American dollars were exchanged in ratio 4.2 FIM for 1 USD. When the United States left the Bretton Woods system in 1971, the Finnish markka was pegged with the currency basket [XDR]. Still, the currency devaluation was performed in order to follow closely the falling American dollar - the currency in which powerful Finnish paper industry was trading. In the eighties the monetary policy changed and Finland begun to strengthen the currency to such a degree that in 1990 the country has become world's most expensive country in terms of nominal values. The economic development, however, was based on the increasing external debt and the need to service this debt coincided with the collapse of a major trading partner - the Soviet Union. This led to the economic crisis in 1992. In 1996, the Finnish markka was incorporated into the Exchange Rate Mechanism ERM II. The euro [EUR] currency was introduced virtually on January 1, 1999, and the Finnish markka [FIM] remained in circulation until February 28, 2002.