Base rate

The Ministry of Finance confirms the base rate of interest for half a year at a time each June and December. The rate is determined according to the average for the 12-month Euribor during the three months preceding confirmation. The Ministry confirms the base rate to the nearest quarter of a percentage point. Under current practice, the reference rate and penalty interest are announced by the Bank of Finland.

When Finland joined the third phase of Economic and Monetary Union at the beginning of 1999, changes were made in the procedures for determining both the base rate and the reference rate of interest as provided in the Interest Act. Responsibility for the base rate was transferred at this time from the Bank of Finland to the Ministry of Finance.

Responsibility for the reference rate and penalty interest also lay with the Ministry of Finance during the period 1 January 1999 - 30 June 2002. However, the Interest Act was amended again as of 1 July 2002, when responsibility for announcing the reference rate used in determining penalty interest was transferred back to the Bank of Finland.

Responsibility for drafting the Interest Act belongs with the Ministry of Justice.

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