1 Peseta – Spain

In 1980, Spain's currency situation was defined by its ongoing transition from the autarkic policies of the Franco era to integration with the wider European economy. The official currency was the peseta, which was managed under a controlled exchange rate regime with periodic devaluations. However, the economy was still grappling with the legacy of the 1970s oil crises, which had triggered high inflation (approximately 15% in 1980), stagnant growth, and a significant balance of payments deficit. This "stagflation" created intense pressure on the peseta, as confidence wavered and capital flight became a concern for policymakers.

The government, led by Prime Minister Adolfo Suárez, and the Bank of Spain faced a difficult trilemma: controlling inflation, maintaining a stable exchange rate, and allowing for the free movement of capital needed for modernization. In response, a dual exchange market was established in 1979, creating an official fixed rate for essential transactions and a floating "free" rate for financial operations. This measure aimed to stem speculative attacks and conserve foreign reserves, but it was a clear sign of a currency under stress and reflected the challenges of managing monetary policy during a fragile democratic consolidation.

Ultimately, the situation in 1980 was a pivotal moment that highlighted the unsustainability of Spain's isolated economic model. The pressures of that year accelerated the push for broader economic reforms and clearer alignment with Europe. This path would lead to Spain's entry into the European Economic Community in 1986 and the eventual adoption of a single market, setting the stage for the peseta's later inclusion in the European Exchange Rate Mechanism (ERM) in 1989 as a precursor to the euro.