On 1 January 2014, Latvia adopted
the euro as its official currency and the changeover is running smoothly
and according to plan. The previous national currency – the lat – is
now being phased out during a transitional two-week dual circulation
period when both currencies have legal tender status. By the end of
Thursday 2 January, 30 % of payments in shops were being made in euro
only and 94 % of customers were getting their change in euro. No major
problems were observed in banks or in the retail sector.
According to a recent Commission survey1,
a large proportion of Latvians already had euro cash two days before
the changeover: 52 % had euro banknotes and 64 % had euro coins –
typically from trips abroad, but many also from an exchange in a bank or
post office in Latvia or coins from euro starter kits. The widespread
holdings of euro cash in advance of €-day contribute to a smoother cash
changeover.
The conversion
of ATMs (cash dispensers) went smoothly and virtually all ATMs have
been distributing euro banknotes as from the first hour of 1 January.
Furthermore, several branches of the three largest banks were open for
cash services on Wednesday 1 January. Point-of-sale terminals for card
payments in shops were likewise successfully converted to euro in time
for the opening of shops on 2 January.
Due to the New
Year holidays, commercial activity during the first two days of the
changeover was lower than normal. According to the Commission survey2,
most people who made a purchase in cash on 2 January used Latvian lats,
in order to use the old currency in shops rather than having to go to a
bank to exchange them. However, at the end of the second changeover
day, 30 % of those polled already paid in euro only, which is a very
high figure compared to previous changeovers.
Commercial banks had received euro
banknotes and coins in advance from the Latvian Central Bank and had in
turn supplied euro cash to shops and other businesses under a specific contract,
so that they could handle payments and return change in euro as from
the first changeover day. The successful advance supply of cash enabled a
very high number of retailers to provide change in euro only. At the
end of the second day of the changeover, 94 % of the change was already
given in the new currency. This is important in order to withdraw the
old Latvian lats from circulation as quickly as possible.
After the first two days with their new
currency, 25 % of citizens polled said they already had only or mostly
euro banknotes in their wallet.
Thanks to careful preparations, the
start of the changeover has been successful. No major problems have been
encountered so far and banks and retailers were generally doing well
with the first days of the changeover.
