20 Markkaa – Finland

In 1931, Finland found itself in a precarious monetary position, caught in the global storm of the Great Depression. As a small, open economy heavily reliant on exports of timber and pulp, it was acutely vulnerable to the collapse in international trade and commodity prices. The country had maintained the gold standard since 1926, pegging the Finnish markka to gold, which meant its monetary policy was largely dictated by external gold flows. This rigidity became a severe liability as the depression deepened, causing deflation, a sharp decline in industrial output, and soaring unemployment, which strained the banking sector and public finances.

The situation reached a critical point in the autumn of 1931 following Britain's dramatic departure from the gold standard in September. This event triggered a wave of speculative pressure against currencies still pegged to gold, including the markka. Finland experienced massive capital outflows as investors feared a devaluation, rapidly depleting the Bank of Finland's gold and foreign exchange reserves. Despite attempts to defend the peg through high interest rates, the unsustainable pressure forced the government and the central bank to act.

Consequently, on October 12, 1931, Finland suspended the gold standard and allowed the markka to depreciate. This decisive move, taken just weeks after the British exit, was relatively swift compared to many other European nations. The devaluation provided immediate relief by making Finnish exports more competitive and halting the drain on reserves. It marked the beginning of Finland's independent monetary policy in the 1930s, a shift that, combined with strict fiscal discipline, helped the country navigate the remainder of the depression and stabilize its economy.