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1989–1992: from re-establishment to monetary reform

26 September 1987

The Edasi newspaper publishes an article by four men – Siim Kallas, Tiit Made, Edgar Savisaar and Mikk Titma – entitled “Proposal: the Estonian SSR Transferring to Full Self-Management”. Among other things, this gives rise to the re-establishment of Eesti Pank and the re-introduction of a national currency.

28 December 1989

Eesti Pank is established in December 1989 on the basis of the Bank Law of the Estonian SSR, which is adopted while Soviet rule is still in force. On the day of adoption of the law, Rein Otsason is appointed as the first Governor of Eesti Pank. The central bank operates according to the Bank Law of the Estonian SSR until June 1993 and commercial banks until January 1995. Banks follow the legislative acts and chart of accounts established by the State Bank of the Soviet Union.


Rein Otsason. Source: Eesti Pank Museum

1 January 1990

Eesti Pank commences work again after a pause of fifty years. The situation is complicated, because the statehood of Estonia has not yet been restored and, in addition to Eesti Pank, another central bank operates in Estonia. The initial idea of making the transition to the national currency by the end of the same year, 1990, cannot be implemented.

22 January 1990

The Presidium of the Supreme Soviet appoints the first Supervisory Board (consisting of five members) of Eesti Pank. The then Supervisory Board performs functions placed within the authority of the Executive Board of the central bank today. The tasks of the re-established Eesti Pank are not entirely clear at first. Under the resolution of the Supervisory Board, loans are granted to state and private companies, the maturity dates of which must later be postponed due to the deep economic crisis. Some bad debts are even written off.

28 June 1990

The first currency auction of Eesti Pank is held. There are three bidders and buyers. The US dollars are bought at a price of 27 roubles. As the official exchange rate of the dollar is still 62 kopeks in the Soviet Union, the price differs 43.5 times in the auction. Moscow’s reaction to the results of the action is painful. Nevertheless, the auctions of Eesti Pank become a recognised currency exchange point across the former Soviet Union, where the number of participants amounts at times to 120–140. Eesti Pank organises currency auctions until August 1991. The experience gained is used later in preparing and implementing the monetary reform.

Summer 1990

The Supreme Soviet (the Parliament) of the Republic of Estonia assigns the government and Eesti Pank the task of presenting a concept and action plan of the monetary reform. Both the government and Eesti Pank find that the Parliament and government are not entirely appropriate institutions to prepare the detailed plan of the monetary reform. Therefore, a proposal to form a Monetary Reform Committee with extensive authorities is added to the concept of the government.

27 March 1991

The Supreme Soviet of the Republic of Estonia decides to establish the Monetary Reform Committee with members Edgar Savisaar (Prime Minister), Rein Otsason (Governor of Eesti Pank) and an independent scientist – initially Siim Kallas, later Rudolf Jalakas. The Committee is granted powers to organise the monetary reform. The powers are effective until 29 June 1995 and the Committee is required to report to the Parliament.

20 August 1991

The independence of Estonia is restored. Eesti Pank commences work to resolve all of the conceptual, strategic, tactical and technical matters of the monetary reform in order to organise the reform in the first half of 1992.

1 October 1991

Siim Kallas assumes office as Governor of Eesti Pank.


Siim Kallas. Source: Eesti Pank Museum

October 1991

Arnold Rüütel, the Chairman of the Supreme Soviet of the Republic of Estonia, grants Siim Kallas, the Governor of Eesti Pank, authority to represent Estonia in negotiations with the Bank for International Settlements and countries in whose banks the gold of Eesti Pank has been deposited as reserves backing the kroon.

December 1991

The Supreme Soviet of the Republic of Estonia declares Eesti Pank the legal successor of the Eesti Pank established in 1919. Negotiations with London, Stockholm and Basel begin to regain the gold of Estonia and thereby support preparations for the monetary reform.

January 1992

The government of Great Britain is the first to return the gold of Estonia delivered to the Soviet Union in 1967: the decision is made in January 1992 and the return is formalised in spring of the same year. As negotiations with Sweden and Switzerland to get the gold back take time, but it is not expedient to postpone the introduction of the monetary reform, there is a need to form a temporary reserve. In consultations held with Arnold Rüütel, a proposal is made to establish the currency reserve of the Republic of Estonia on account of the reserve cutting areas of the national forest fund. The Supreme Soviet approves the formation of the reserve known as the kroon forest by a resolution of 23 January 1992. The reserve includes cutting areas to a value of 150 million US dollars. However, it is not necessary to use the reserve based on the kroon forest and the importance thereof is limited to the creation of an emotional background. In June 1997 the Riigikogu declares invalid the decision of the Supreme Soviet of 1992 according to which part of the national forest fund has been assigned to Eesti Pank as a currency reserve.

25 May 1992

Estonia becomes a member of the International Monetary Fund (IMF). The corresponding application was submitted on 9 September 1991, immediately after the restoration of independence of Estonia. The IMF plays a significant role in developing the ideology of the Estonian monetary reform of 1992.


Siim Kallas, the Governor of Eesti Pank (pictured centre), signing the document.
Source: Vambola Salupuu

June 1992

In June 1992 the rights and obligations of Eesti Pank as the founding member are restored in the Bank for International Settlements in Switzerland and this also provides Eesti Pank with access to the gold deposit in New York in January 1993. Sweden returns the gold to Estonia on 1 July 1992.

9 June 1992

By a resolution of the Supervisory Board of Eesti Pank, Siim Kallas and Ülo Uluots, members of the Supervisory Board, are assigned the task of presenting a proposal to the Supreme Soviet of the Republic of Estonia to appoint Ardo Hansson and Raimund Hagelberg as substitutes for Rudolf Jalakas, an independent scientist who is a member of the Monetary Reform Committee of the Republic of Estonia, if the latter is unable to perform his obligations.

17 June 1992

The Supervisory Board of Eesti Pank decides to establish 15% as the reserve requirement ratio for banks.

18 June 1992

The Supervisory Board of Eesti Pank approves the guidelines for foreign currency transactions between Eesti Pank and authorised banks, new rules of import and export of foreign currencies and several other documents dealing with foreign currency transactions.

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