• Will cash and non cash euro be introduced at the same time?

Yes, both cash and non-cash euro will be introduced at the same time in Latvia.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• What will change after the euro changeover in payments by individuals and banks?

All transactions and payments to banks as of the euro changeover day will be conducted in euro only. As of the day of euro changeover, all payments in the Bank of Latvia payment systems will be made in euro only, in accordance to the previous principles for execution of payments between Latvian banks.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• How will the lats in bank accounts be exchanged to euro?

Lats in bank accounts will be changed to euro automatically in accordance with the enacted rate of the Bank of Latvia, which was irreversibly fixed by the EU member states, at 0.702804 lats per euro (1 lats = 1.42 euro).

On the euro changeover day, all non-cash lats in bank accounts will be calculated and expressed in euro according to the official conversion rate, and all non-cash transactions and payments will be made in euro. As of the euro chanegover day, all payments will be made only in euro in the Bank of Latvia payment systems.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• What will happen to my lats checking/payment account at the bank?

The customer account number will remain the same. The lats in the account will be automatically converted at the official rate without charge.

For example, if the customer of the bank has two accounts - one for lats and one for euro, then, after the introduction of the euro, he will have two accounts in euro.

Within two months, i.e. until 28 February 2014, the customer will be able to transfer the balance of one account to the other account and close the empty account free of charge.

• What will happen to my payment card?

Your payment card will continue to operate as before. Because of the euro changeover, there is no need to change your card. Each card will continue to operate until the expiry date, which is stated on the card. As of 1  January 2014, using the card at the ATM you will receive and make payments only in euro.

• In what way will my payment history appear in Internetbank after 01/01/2014?

Payments made by 31 December 2013 will appear in lats and the payments made after the introduction of the euro will appear in euro.

• Will there be any restrictions on non-cash exchanges from lats to  euro?

Non-cash money, i.e. money in bank accounts of private individuals and companies will be automatically converted on 1 January 2014. in accordance with the enacted rate of the Bank of Latvia, which was irreversibly fixed by the EU member states, at 0.702804 lats per euro (1 lats = 1.42 euro) - free of charge and without any restrictions.

• Will trading venues be able to issue balance in lats after the euro changeover day?

Trading and service venues will be able to issue balance only in euro, but there are some exceptions. In public transport, it will be possible to provide change   in the currency in which the payment is made. Slot machines and gaming machines will be able to use one or the other currency during the parallel circulation of the lats and the euro.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• Will there be a limitation to the cash exchange from lats to euro?

Individuals and companies will be able to exchange all of their disposable cash without any amount restrictions.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• Will there be a charge for changing 'piggy bank coins'? Currently, many banks charge for converting small coins (1 santimi, 5 santimi etc.) into notes, for example?

Replacement of lats with euros will be made free of charge. For three months this could be done in 302 departments of Latvijas Pasts [Latvia Post], for 6 months in commercial banks and for unlimited period of time in the Bank of Latvia.

• Will exchange offices also change lats to euro?

If six months after the introduction of the euro, currency exchange offices will choose to change lats to euro, this exchange will be free of charge.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• What currency will it be possible to get from ATMs while both lats and euro are in circulation at the same time?

After the introduction of the euro, ATMs will no longer dispense lats. Most ATMs will issue euro from the first day of the implementation of the euro. –Some of the older generation ATMs could be disabled for some time to prepare them to dispense euro.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• At the time when both lats and euro will be circulated, which banknotes and coins will be used to  pay in cash machines ( e.g.,in parking lots, fuel stations)?

From the very first day of euro changeover, it will be possible to use only euro coins and banknotes in cash machines.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• What will happen to the loan and deposit agreements denominated in lats?

There will be no need to amend or replace the existing agreements with new ones. The amount will be automatically converted into euro in accordance with the enacted rate of the Bank of Latvia, which was irreversibly fixed by the EU member states, at 0.702804 lats per euro (1 lats = 1.42 euro). The law on the introduction of the euro provides for automatic recalculation.

The same applies to all other contracts between private companies.

After the changeover to the euro, lats loans will become cheaper. The loan rate is formed from a variable part and bank's rate. The euro floating rate or EURIBOR is lower and more stable than lats rates RIGIBOR. RIGIBOR at the transition will be automatically converted to the EURIBOR rate and thus drop..

In addition, lats rates of economic instability moments have risen substantially, with the lats borrower's monthly payment increasing even up to three or four times, from 150 to 500, whereas the euro rates even in a crisis have remained low and stable.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• What will happen to debit and credit cards issued for payments in lats?

Lats credit and debit balances will be automatically converted to euro in accordance with the enacted rate of the Bank of Latvia, which was irreversibly fixed by the EU member states, at 0.702804 lats per euro (1 lats = 1.42 euro)

Guidance for more information: Law on the Procedure for the Introduction of Euro

• How will the amounts of money expressed in lats in contracts between individuals and businesses be converted?

These amounts will be recalculated automatically in accordance with the enacted rate of the Bank of Latvia, which was irreversibly fixed by the EU member states, at 0.702804 lats per euro (1 lats = 1.42 euro).

Guidance for more information: Law on the Procedure for the Introduction of Euro

• How and when will the securities expressed in lats be expressed in euro?

On the euro changeover day, lats securities will be denominated to euro at the official conversion rate according to the principles of rounding.

The nominal value of shares will be expressed in euro and euro cents and limited liability companies’ nominal value of capital will be expressed in whole euro. Each individual investor-owned debt securities rated amount will be expressed in euro cents.

Guidance for more information: Law on the Procedure for the Introduction of Euro

• What will happen to gift cards and other payment instruments which show nominal value expressed in lats?

After the euro introduction date, gift cards and other payment instruments in lats will be valid until the specified deadline. A gift card or other payment instrument in lats will be automatically converted into euro at the official conversion rate.

Guidance for mor information: Law on the Procedure for the Introduction of Euro

• How to make the changeover easier for oneself?

If possible, keep the money in your bank account, because non-cash change from lats to euro will take place automatically and free of charge.

Remember: if you want to exchange more than 3,000 lats at once, banks and the Latvian Post Office will have the right to evoke the requirement that you apply for the exchange operation a maximum of three working days in advance.. It is also important to know that when executing transctions with large amounts of cash, banks and the Latvian Post Office have the right to demand your passport or identity card (I.D.).

• Will it be possible, after 1 January 2014, to change lats to euro  also in foreign countries?

For two months, lats banknotes will be exchanged to euro at the official conversion rate in all euro area countries.

In all euro area countries in one place (the central bank or its designed institution) are exchanged to euro new euro area member`s banknotes at the official conversion rate two months after the introduction of the euro.

Guidance for more information: The European Central Bank Guideline: ECB/2006/10

• How will lats be exchanged in foreign countries` bank accounts?

Latvian laws have no effect in another jurisdiction, and how lats will be converted depends on the conditions for conversion of money in multi-currency accounts; these conditions were accepted by the customer when opening the account. It is worth it to find out about this  process as soon as possible.

• Will the commission on money transfers to euro area countries decrease?

It is expected that after the introduction of the euro, cross-border payments in euro from Latvia will cost about as much as current domestic payments.

As of 2003, the commission for payments in euro must be the same for both domestic and cross-border payments to European Economic Area countries.

After joining the euro area, all domestic payments made in lats will become domestic payments in euro. The Bank of Latvia does not see any reason for increases in domestic payment commission. Therefore, we expect that after the introduction of the euro, cross-border payments in euro will cost about the same as the current domestic payments in lats.

As before, the fees will depend on the competition among banks providing payment services.

• Will transfers to other euro area countries will be faster after the introduction of the euro?

Payments to other euro area countries will be just as fast as at present - the recipient must receive the payment no later than on the next business day.

This is determined by EU regulations and the Law on Payment Services and Electronic Money. The same will apply after the lats changeover to the euro. Banks already have access to the payment systems that allow them to swiftly execute payments in euro.

• When will the Bank of Latvia deliver banknotes to banks and banks to stores?

In November 2013, the Bank of Latvia will supply euro banknotes and coins to commercial banks, so that from can begin to  provide them to their customers: businesses etc.

• Are the payment systems of the Bank of Latvia prepared for the euro changeover?

Yes, the payment systems of the Bank of Latvia are prepared for the euro changeover.

Since2007, the Bank of Latvia together with other European System of Central Banks members ensures the operations of the Automated Real-time Gross settlement Express Transfer system TARGET2. TARGET2 provides payments, interbank transactions, large and urgent customer payments as well as other final settlements of EU payment systems. The Bank of Latvia maintains the TARGET2 component of Latvia whose participants are Latvian commercial banks, the Bank of Latvia and the State Treasury.

The Bank of Latvia maintains the customer payment system ECS (Electronic Clearing System), which provides a quick and efficient settlement of payments in lats and, as of 2008, in euro. Since November 2010, the ECS is a SEPA (Single Euro Payments Area) compliant system and, with the help of the ECS, the banks can execute and receive its customers’ payments in euro in all the EU countries as well as Iceland, Liechtenstein, Norway, Switzerland and Monaco. Within the EU, the ECS enables payments in euro to be executed within one business day.

Guidance for more information: The payment systems of the Bank of Latvia

• How will the functions of The Bank of Latvia change after the introduction of the euro?

After joining the euro area, the functions of the Bank of Latvia will remain unchanged. Only the location of monetary policy decision making will change:  in the euro area, the Governing Council of the European Central Bank takes monetary policy decisions. The central banks of the euro area`s countries have equal representation there.

Instead of narrowing, the Banks of Latvia’s range of functions will expand, when Latvia fully joins the euro area. As previosly, the central bank will issue cash currency, only then  it will be euros instead of lats; it will ensure  system smooth functioning of the payment syestems and account for the balance of payments, but in regard to interest rate and other monetary policy decisions, it will have to have in sight the entire euro area in order to be able to participate in equal decision-making. The Bank of Latvia (also in cooperation with other state institutions such as the Ministry of Finance) will continue to represent the interests of Latvia in several international institutions (e.g., the International Monetary Fund,  European Commission Expert forums, etc.).

Guidance for more information: www.ecb.europa.eu

• What will happen with the Bank`s of Latvia foreign currency  and gold reserves after the introduction of the euro?

After the introduction of the euro, foreign currencies and gold reserves will remain property of the Bank of Latvia. The Bank of Latvia will transfer 4.4 % of the foreign reserves to be managed by the European Central Bank, but the Bank of Latvia will continue to receive the accrued interest.

In accordance with the statutes of the  European Central Banks System and the European Central Bank, a relatively small foreign currency and gold reserves are transferred from the euro area member states for the management of the European Central Bank, which  includes them in the composition of its foreign reserves. For the relevant sum, the Bank of Latvia will obtain a claim expressed in euro against the European Central Bank and receive interest income. The Bank of Latvia will transfer to the ECB international currencies and gold worth 252 million euro. The proportion of gold in this sum is expected at 15% or approximately 38 million euro, with the remainder as foreign currency assets. At the end of 2012, the assets of the Bank of Latvia were approximately 3.99 billion lats (approx. 5.68 billion euro), thus, the part of the foreign currency and gold reserves transferred to the ECB will amount to 252 million euro or 4.4%. All other foreign currency and gold reserves, just like before will constitute reserve assets of the Bank of Latvia and they will be invested in safe financial instruments.

Guidance for more information: Treaty on European Union and Treaty on the Functioning of the European Union; Statute of the ESCB and of the ECB; The Bank of Latvia's Balance Sheet

• Will the Bank of Latvia continue to earn and will the profit be transferred to the government budget?

As before, if the Bank of Latvia makes a profit, part of the profit will be transferred to the government budget.

After the introduction of the euro, the Bank of Latvia will continue to finance its activities mostly from the profit earned from managing its foreign exchange and gold reserves. These revenues provide funding for the activities of the Bank of Latvia so it can effectively fulfill its tasks and achieve its goals. Unlike other financial institutions such as commercial banks, however, the main objective of central banks (including the Bank of Latvia) is not to make profit, because that might interfere with the Bank of Latvia’s main task - to maintain price stability. Moreover, because of their specific tasks, central banks normally are exposed to greater financial risks and, as a result, their profit is largely determined by external conditions, such as interest rate and exchange rate changes in the external financial markets as well as by the need to perform certain monetary transactions.  If the Bank of Latvia makes a profit, then, according to the law "On the Bank of Latvia" the Bank transfers to the basic national budget a part of the profit from the reporting year, which is calculated by applying the tax rate for residents set in the Law "On Corporate Income Tax", as well as payments for the use of state capital at  50 per cent of the profit gained in the reporting year.

Guidance for more information: The Law "On the Bank of Latvia"

• How will the Bank of Latvia  set and publish the euro Exchange rate against other currencies?

After the introduction of the euro, the Bank of Latvia will discontinue setting the official foreign exchange rates.  Instead of the official foreign Exchange rate, the euro reference rate published by the European Central Bank (ECB) will be used and republished on Bank of Latvia’s website.

 Currently, on every business day, the Bank of Latvia determines the Exchange rates of several foreign currencies against the lats.   These rates come into force on the next day and are used as provided for by the Republic of Latvia laws and regulations (reevaluation of foreign assets in accounting, calculation of customs duties, etc.). Current procedure also ensures that current daily exchange rates are available at the beginning of the day (published on the Bank of Latvia website, in newspapers, sent by e-mail). After the introduction of the euro in Latvia, the Bank of Latvia will cease to determine the official foreign exchange rates . One of the exchange rate sources for the euro is the so-called euro foreign exchange reference rate, which is determined by the European Central Bank on the basis of the System of Central Banks and other central banks conciliation procedure, and it is determined every working day at. 15:15 (Latvian time) and reflects the exchange market conditions at that time. The euro exchange reference rate set by the ECB is available on the ECB website, as well as in electronic information systems (Reuters, Bloomberg). As of the day of the introduction of the euro in Latvia, the reference to the published ECB euro reference rates will be published on the website of the Bank of Latvia.

Guidance for more information: www.bank.lv and www.ecb.europa.eu

• What will be the money market index instead of the lats RIGIBOR index?

Since there will no longer be the lats, the money market index RIGIBOR will not exist either; instead of RIGIBOR the EURIBOR index will be used.

After the introduction of the euro, the Bank of Latvia will no longer continue to calculate the RIGIBOR. Already now, the variable part of euro interest rates is often linked to the EURIBOR index. The EURIBOR index is set by the European Banking Federation, EURIBOR is an interest rate at which banks can borrow EUR resources in the euro area interbank market. The index was established in 1999, along with f the implementation of the euro.  It is determined on each working day, considering interest rates offered by the euro area and other major global banks.

Guidance for more information: http://www.euribor-ebf.eu/