What is the LVL (Latvian Lat)
LVL is the currency abbreviation for the Latvian lat (LVL), which was the currency for Latvia from 1993 to 2014.
Before it went out of circulation in 2013 and was replaced by the euro as Latvia’s official currency, the Latvian lat was the fourth-highest valued currency in the world.
Breaking Down LVL (Latvian Lat)
The Latvian lat was made up of 100 santïms and was often presented with the symbol Ls before the numerals, or s after them, for example 100 Latvian lats would be referred to as Ls100 or 100s.
In 1922, the LVL replaced the Latvian ruble. But in 1940, when Latvia became part of the Soviet Union, the lat was replaced by the USSR ruble. In 1993, when Latvia gained its independence from the Soviet Union, the lat was restored as the country's official currency, replacing the ruble at a rate of 1:200.
Latvia is sometimes referred to with the nickname ‘Baltic tiger,’ which refers to its double-digit economic growth rates from 2000 to 2007. The country’s economy grew at a rate of 11.9 percent during this period, but was hit hard by the financial crisis in the years that followed. As of 2017, the country has an inflation rate of 3 percent and a GDP growth rate of 3.8 percent. More than half of Latvia’s GDP comes from exports.
The Transition from the LVL to the Euro
Latvia officially joined the European Union in May 2004. The country also joined the World Trade Organization in 1999 and the OECD in 2016.
Latvia planned to adopt the euro in 2008, but because of the global financial crisis, it was unable to reduce its inflation rate to the required level in time to do so. To adopt the euro as its official currency, the convergence criteria include a requirement that countries must have an inflation rate that is within 1.5 percent of three EU countries with the lowest rate.
However, in January 2014, Latvia joined the Eurozone, officially adopting the euro as its currency and becoming the 18th member of the Eurozone. When it made the switch in currency, the average inflation rate in the country for the previous 12 months had been 1.3 percent, which was below the requirement of 2.7 percent.
At the time of the move to the euro, the fixed exchange rate was 0.702 Latvian lats to 1 euro.
In order to help with the transition to the euro and avoid price increases, prices on consumer goods have been displayed in both Latvian lats and euros since October 2013.