It was primarily founded to fund the war effort against France.”6 Many of the early central banks were established to deal with monetary disarray. Political and financial turmoil provides the context for the establishment of the Banco de Portugal 175 years ago.
In 1846 the Portuguese State was on the “brink of bankruptcy”, the country was in civil war and as the museum exhibits explain “the armies of the Provisional Junta of the Supreme Government of the Kingdom, based in Porto, were advancing towards Lisbon in order to remove the new government of Costa Cabral.”7 The Bank was granted the power to issue banknotes convertible into hard currency.