The History of Exchange Control in Finland

Finland has followed overall trends in Europe and dismantled exchange controls at roughly the same pace as Sweden and Norway. The paper discusses both the extent and legal aspects of exchange control in different decades (1920s–1980s)in Finland.

Introduction: An exchange control system was operated in Finland in the period 1917-1920 because of imbalances in foreign trade and a consequent shortage of foreign exchange. The use of foreign exchange was restricted mainly to payments for permissible imports and the payment of foreign debts that had fallen due. In the 1920s, the trade account was in balance on average, and no exchange controls were applied. In the latter half of 1931, it was attempted to support the external value of the Finnish markka by means of various exchange control measures. Mter Finland abandoned the gold standard, the trade account remained in surplus for the major part of the 1930s owing to the undervaluation of the markka. It was not until the outbreak of World War II in autumn 1939 that exchange control was reintroduced.

Author: Päivikki Lehto-Sinisalo

Source: Research Discussion Papers, Bank of Finland

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