LTL - Lithuanian Litas

Overview of the Lithuanian Litas (LTL)

The Lithuanian Litas, with the symbol Lt and ISO 4217 code LTL, was the official currency of Lithuania until January 1, 2015. The currency unit of the litas is lt, the plural form is litai (nominative) or litų (genitive). 1 LTL is divided into 100 cents (singular: centas, plural: centai).

The currency was first introduced on October 2, 1922, after World War I, when Lithuania declared independence, and reintroduced on June 25, 1993, after a period of currency exchange from the Soviet ruble to the Litas with a temporary talonas.

The name Litas was derived from the name of the country, similar to the Latvian currency and its lats. From 1994 to 2002, the litas was pegged to the US dollar at a rate of 4 LTL = 1 euro. The Litas was pegged to the euro at a rate of 3.4528 LIT = 1 euro from 2002. Initially, the litas was expected to be replaced by the euro on January 1, 2007, but persistent high inflation along with the economic crisis delayed this transition.

By January 1, 2015, the litas was officially converted to the euro at the exchange rate of 3.4528 LTL to 1 euro. However, the coins and banknotes of the second litas will still be exchanged for euros indefinitely by the Bank of Lithuania.

The history of the Lithuanian Litas (LTL)

The Lithuanian Litas has a rather complex development history with various phases depending on the national history as well as the domestic economic and political situation.

From 1922 to 1941: The first Litas

On October 2, 1922, the Litas was introduced to replace the ostmark and ostrubel - two currencies issued by the German army during World War I when they occupied Lithuania. The Ostmark was also known as auksinas in Lithuania.

The Litas was valued at 10 litų = 1 US dollar and was divided into 100 centų. Before the global economic recession, the Litas was a fairly strong and stable currency. One litas was backed by 0.150462 grams of gold stored abroad by the Bank of Lithuania.

In March 1923, the circulation reached 39,412,984 litas, supported by 15,738,964 in actual gold and 24,000,000 in high-value exchange securities. By 1938, 1 US dollar was exchanged for 5.9 litas, increasing to about 20 US cents before disappearing in 1941.

In March 1939, the Klaipėda region (also known as the Memel Territory) was annexed by Germany. On the same day, the reichsmark was officially used, replacing the litas in the region, with an exchange rate of 1 litas for 40 pfennig. By May 20, 1939, the residents of Memelgebiet could exchange litas for reichsmark. In April 1941, Lithuania was annexed by the Soviet Union, and the ruble replaced the litas, with an exchange rate of 1 litas to 0.9 rubles, even though the actual value of the litas was only about 3 to 5 rubles. The exchange rate brought significant profits to the party officials and the Soviet military.

Due to the attempt to protect the currency, which people were buying en masse, production decreased, leading to material shortages. After that, cash withdrawals were limited to 250 litų before the litas was completely abolished. In 1941, the litas was completely banned from circulation.

From 1993 to 2015: The second Litas

The litas was once again recognized as the official currency of Lithuania on June 25, 1993, when this currency replaced the temporary talonas at a rate of 1 litas = 100 talonas.

In 1993, banknotes (dated 1991) were issued in denominations of 1 litas, 2, 5 litai, 10, 20, 50, and 100 litų. Due to its poor design, this currency had low security, was easy to counterfeit, and a new series of banknotes with denominations of 1 litas, 2, 5 litai, 10, 20, and 50 litų was introduced as a replacement. The first series of banknotes only circulated the 100 litas note.

The 200 litas banknotes were officially put into circulation in 1997, followed by the 500 litas banknotes in 2000.

Coins were introduced in 1993 with denominations of 1 centas, 2, 5 centai, 10, 20, 50 centų and 1 litas, 2, 5 litai. The 1 centas, 2, and 5 centai coins are made of aluminum, the 10, 20, and 50 centų coins are made of copper, and the litas coins are minted from nickel-brass.

In 1997, the 10, 20, and 50 centų coins made of nickel-brass were introduced, followed by the 1 litas coin made of nickel-brass, and the 2 and 5 litai bi-metal coins in 1998. All these coins have a front design featuring the coat of arms in the center and the state name "Lietuva" in uppercase. 

The relationship between the Lithuanian Litas and the Euro

In 1998, after a successful round of negotiations with the European Commission, the idea of linking the Lithuanian Litas to the future currency of the European Union emerged. By 1999, the Bank of Lithuania had proposed a common currency with both the US dollar and the euro.

The pegging of the litas to the euro was officially proposed to be implemented in the second half of 2001.

On February 2, 2002, the litas was pegged to the euro at an exchange rate of 3.4528 to 1 (1 LTL = 0.28962 EUR). This exchange rate remained unchanged until the litas was completely replaced by the euro on January 1, 2015.

After pegging to the euro, Lithuania effectively became a member of the Eurozone. Lithuania became a part of ERM II since June 28, 2004. The design of Lithuania's euro coins has been prepared.

Lithuania has postponed the date of adopting the euro multiple times because it did not meet the criteria. High inflation - reaching 11% in October 2008, exceeding the then-acceptable limit of 4.2% - caused Lithuania to fail to meet the criteria.

In 2011, surveys showed opposition to this currency. On July 23, 2014, the Council of the European Union adopted a decision allowing Lithuania to adopt the euro as its currency on January 1, 2015. The Litas and the euro were both legal currencies in Lithuania until January 16, 2015.