Rumor - the new anti-Estonian weapon

Nov 27, 2007
By Mike Collier

WHAT'S IT WORTH? The Bank of Estonia insists it has no devaluation plans (Photo: Eesti Pank)

TALLINN – Speculation about a supposed devaluation of the Estonian currency, the kroon, could be more than the usual market rumors, according to Finance Minister Ivari Padar.

After various Russian-language websites – including that of the ‘Night Vigil’ campaign – published stories suggesting a devaluation of the kroon was imminent, banks have been seeing higher than usual numbers of customers asking to exchange their kroons for euros and other alternative currencies.

Night Vigil suggested that after devaluation, the exchange rate would be 24.6 kroons to the euro, against the current level of 15.65 kroons.

The Bank of Estonia issued a statement on Nov. 26 denying that Night Vigil’s claims had any basis in fact at all.

“Eesti Pank refutes all rumours regarding the alleged devaluation of the Estonian kroon. The peg of the Estonian kroon to the euro is 15.6466 as before and the peg will persist until the adoption of the euro,” the statement says.

It continues: “Eesti Pank invites people to not believe false messages and let these affect you. Since the peg of the kroon to the euro will not change, there is no point in exchanging the kroon for other currencies.

“All the kroons in circulation are backed by foreign currency reserves and Eesti Pank confirms that all kroons can be exchanged for euros if necessary.”

Having earlier this year weathered a series of cyber attacks thought to emanate from Russia, it seems as if people looking to destabilise Estonia have realised that rumors on the financial markets can be a significant economic weapon in their own right. Similar rumors have appeared in the Finnish press in recent weeks and despite an absence of any substantive proof to back them up, have refused to go away.

Commenting on the rumors, Estonian Finance Minister Ivari Padar said: “I think law enforcement agencies should look into how and by whom such information was distributed.”

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