Latvia bids final farewell to the lats

Take note – story published 9 years ago

Monday, June 30 marks the final day in Latvia's long euro changeover plan with the official end of a dual-pricing regime.

A nine-month period of compulsory dual pricing for goods and services began on October 2013 and comes to an end at the close of June, following the replacement of the national currency, the lats, with the euro on January 1, 2014.

Retailers can continue to show two prices if - for some reason - they really want to, but from now on, the euro holds centre stage in Latvia.

“These nine months have been essential for consumers,” Noris Kruzitis of the Latvian Food Traders Association told Latvian Radio, “but the whole process from both the government side and the retailers side has been very well organised.”

Despite initial grumbles from some shoppers that the dual pricing regime was confusing – and several surveys showed the currency switch made people think they were paying higher prices even when they were not – the six-month transition has been remarkable mainly for the lack of problems it has caused.

Fears that euro introduction would lead to major price hikes also proved wide of the mark with the Latvian Central Bank in June predicting average annual inflation of just 1.1% in 2014.

“As was predicted, the effect of the euro changeover on inflation was low at around 0.2-0.3 percentage points,” Janis Silakalns of the Latvian Central Bank told LSM.

Part of that is down to Latvia learning lessons from northern neighbor Estonia, which switched from the kroon to the euro in 2011.

Next the euro baton passes to southern neighbor Lithuania, due to adopt the euro in place of its litas on January 1, 2015 subject to final European Union approval in July.

Now it is Latvia's turn to pass on its lessons, said Silakalns: “Practical cooperation between the Latvian and Lithuanian central banks started last year when Lithuania began its preparations [for euro adoption] and, of course, will continue as long as necessary to help with the smooth and successful integration of Lithuania into all euro-area institutions.”

However, despite getting used to the euro, Latvian retailers and shoppers will not be able to rest on their laurels for too long as eurozone countries are preparing for the launch of a new €10 banknote on 23 September, 2014 - which will involve familiarising everyone with yet another new design.

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