On July 9th this year the ECOFIN Council approved the Latvian participation in the Economic and Monetary Union (EMU) from January 1st 2014. The Bank of Latvia fixed the exchange rate at 0.702804 already in 2005, one lat being equivalent to €1.42.

As of January 1st 2014, financial institutions and stock exchanges will convert electronic lats to Euros. Banks, Latvian Post and the Bank of Latvia will exchange lats to Euros for free. Before the official changeover day the market exchange rates may be different to that set by the Council.

When Latvia joined the EU in 2004 a derogation was applied, postponing joining the EMU until compliance with the Maastricht criteria. The same derogation was also applied to Estonia and other new Member States. Estonia adopted the Euro on January 1st 2011.

The Latvian lat was tied to the Euro with the Bank of Latvia’s central rate of 0.702804 for more than eight years.

All banks in Estonia will be accepting Latvian cash until December 31st 2013. After that date, the European central banks, therefore also the Bank of Estonia will be exchanging notes to Euros according to the central exchange rate during two months until the end of February 2014. It has to be noted, that the Bank of Estonia will only accept notes and in the amount of up to €1000 per person per day.

The banks may refuse bank transfers made in lats on the last days of the year.