Economy, Currency and Banking

The monetary unit of Finland is the single currency of the European Union (EU), the euro (1.07 euros equal U.S. $1; 1999 average). The euro was introduced on January 1, 1999, for electronic transfers and accounting purposes only, and Finland’s national currency, the markka, was used for other purposes. On January 1, 2002, euro-denominated coins and bills went into circulation, and the markka ceased to be legal tender.

As a participant in the single currency, Finland must follow economic policies established by the European Central Bank (ECB). The ECB is located in Frankfurt, Germany, and is responsible for all EU monetary policies, which include setting interest rates and regulating the money supply. On January 1, 1999, control over Finnish monetary policy was transferred from the Bank of Finland to the ECB. After the transfer, the Bank of Finland joined the national banks of the other EU countries that adopted the euro as part of the European System of Central Banks (ESCB).