LVL - Latvian Lats

The history of the Latvian Lats (LVL)

The Latvian Lats has a tumultuous development history corresponding to the various historical periods of Latvia. 

Period 1922 - 1940: The first lats

The Latvian Lats (symbol: ℒ︁𝓈) was first introduced on August 3, 1922, replacing the first Latvian ruble at an exchange rate of 1 ℒ︁𝓈 = 50 Rbls. The Lats was pegged to the gold standard from its introduction until September 28, 1936, when it was pegged to the value of the British pound at the rate of 1 £ = 25.22 ℒ︁𝓈. However, since the pound sterling maintained its standard, a type of peg existed until 1940.

On June 17, 1940, Latvia was occupied by the Soviet Union. The Latvian Republic office of Gosbank replaced the dissolved Bank of Latvia on October 10. On November 25, 1940, the Soviet ruble was put into circulation alongside the Lats at a par value, although the actual monetary value of the ruble was only about 1/3 of the Lats. Therefore, both wages and prices gradually increased to devalue the lats from June to November 1940.

Although the Soviet authorities committed to not abolishing the Latvian Lats, the Lats were officially removed from circulation without warning on March 25, 1941, and all deposits over 1000ℒ︁𝓈 were nationalized. A portion of Latvia's gold, silver, and currency reserves was sent to Moscow at the beginning of the occupation. 

Coins

Coins during this period were issued in denominations of 1, 2, 5, 10, 20, and 50 santīmu, 1 ℒ︁𝓈, 2ℒ︁𝓈, and 5 ℒ︁𝓈. The 1, 2, and 5 coins were minted in copper, while the 10, 20, and 50 coins were minted in nickel. The 1 ℒ︁𝓈 and higher coins were minted in silver with a purity of 83.5 percent.

Banknotes

In 1922, banknotes were issued by the Bank of Latvia with denominations of 20, 25, 50, 100, and 500 ℒ︁𝓈. They also issued 10 ℒ︁𝓈 banknotes, which were actually 500 ruble notes overprinted with the new denomination. In 1925, the government issued banknotes with denominations of 5 ℒ︁𝓈, 10 ℒ︁𝓈, and 20 ℒ︁𝓈.

Second Lats: 1993 – 2013

On March 5, 1993, the Latvian Lats was reintroduced to replace the Latvian ruble, continuing to circulate and remain valid until June 30, 1994, at an exchange rate of LR 200 = Ls 1.

The 5 Ls banknote was the first to be put into circulation, and the 500 Ls banknote was the last to be put into circulation on July 20, 1998. On January 1, 2014, the Lats was replaced by the Euro at an exchange rate of 0.702804 Ls = 1€. The second lats can be exchanged for euros at the official rate at the cash desk of the Bank of Latvia in Riga.

By the time it ceased circulation in January 2014, the Latvian Lats was the fourth highest currency in the world by nominal value, trailing only the Kuwaiti Dinar, Bahraini Dinar, and Omani Rial. The 500 Ls banknote is the third highest denomination in the world, surpassed only by the 10,000 Brunei/Singapore dollar note and the 1,000 Swiss franc note. The abolition of the Maltese lira on January 1, 2008, made the Latvian lats the most valuable currency in Europe.

Coins

During this second phase of the Lats currency, coins were issued in denominations of 1s, 2s, 5s, 10s, 20s, and 50s, 1 Ls, and 2 Ls. In addition to the standard coins, there are also collectible coins such as 3 commemorative circulating coins with denominations of 2Ls, 10Ls, and 100Ls (the latter two being silver and gold respectively), a gold bullion coin of 100Ls, and a series of 1Ls coins with limited designs released twice a year from 2004 to 2013 and once in 2001 and 2003.

The standard 2 Ls coin was initially issued only once in 1992, which was a copper-nickel coin weighing 6g and having a diameter of 24.35mm. This coin was gradually replaced in circulation from 1999 by a bimetallic coin due to counterfeiting issues.

Banknotes

All Latvian Lats banknotes are 130 × 65 mm in size. They are printed by Giesecke & Devrient GmbH in Germany and designed by Imants Žodžiks and Valdis Ošiņš. 

The relationship between the Latvian Lats and the Euro

The Latvian Lats (LVL) was used as the official currency of Latvia until the country joined the Eurozone in 2014. After joining the Eurozone, the Lats was converted to the Euro (EUR) at a fixed rate.

When Latvia switched to using the Euro, the exchange rate between the Lats and the Euro was set at 1 EUR = 0.702804 LVL. This means that the Lats was pegged to the Euro, facilitating financial and trade stability.

The transition to the Euro helps Latvia strengthen economic stability, reduce exchange rate risks, and facilitate international trade transactions.