History of money in Latvia
After the Republic of Latvia was founded on 18 November 1918, the following currencies were in
circulation: ostrubles and ostmarks, issued by the German occupational authorities, German marks,
the "tsar" rubles and kopecks, "money of Duma" and "kerenkas", as well as promissory notes of
several town municipalities.
On 11 December 1918 the Minister of Finance set the official conversion rate for the currencies in
circulation, recognising three different foreign currencies as legal tender in Latvia. However, Latvia
still had no money of its own. It was time to create its national currency.
On 22 March 1919 the Provisional Government of the Republic of Latvia empowered the Minister of
Finance to issue Latvia's first banknotes: Latvian State Treasury notes and exchange notes, naming
them Latvian rubles and Latvian kopecks respectively. From April 1919 to October 1922 the above
notes were issued in the denominations of 1, 5, 10, 25, 50, 100 and 500 rubles, and 5, 10, 25 and 50
paper kopecks. The banknotes were designed by Latvian artists Jūlijs Madernieks, Burkards Dzenis,
Vilhelms Krūmiņš, Hermanis Grīnbergs, and Rihards Zariņš. Thus the basis for a permanent Latvian
monetary system was laid, although Russian and German money still also functioned as legal tender
in Latvia.
On 3 August 1922 the Cabinet of Ministers approved the "Regulation on Money". The lats became the
currency unit of Latvia, and one hundredth of a lats was called a santims. Nevertheless, the Latvian
ruble also remained in circulation.
In order to successfully implement monetary policy, on 19 September 1922 the Constitutional
Assembly approved the Statute of the Bank of Latvia. The Bank of Latvia was granted the right to issue
national currency. On 1 November 1922 the Bank of Latvia started its operation and already on 2
November it put into circulation provisional 10 lats banknotes – the 500 Latvian rubles banknotes
with an overprint "10 lats".
In 1922–1940 the Bank of Latvia issued banknotes in the denominations of 10, 20, 25, 50, 100 and 500
lats. A banknote of 100 lats, designed by artists Rihards Zariņš and Kārlis Krauze, was printed in 1923.
Unfortunately the banknotes printed at the State Securities Printing House could be easily forged;
therefore, pursuant to a resolution of the Council of the Bank of Latvia, from 1924 to 1938 all
banknotes of the Bank of Latvia were printed in the UK, their graphic design being created by British
artists. Only the 100 lats banknote from 1939 was made at the State Securities Printing House (artists:
Jānis Šternbergs and Kārlis Krauze).
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This material has received European Union co-funding
within the grant agreement Communication activities in
connection with the introduction of the euro in Latvia.
The Ministry of Finance, in turn, issued state treasury notes in denominations of 5, 10, and 20 lats.
These were printed at the State Securities Printing House. The banknotes were designed by artists
Rihards Zariņš, Kārlis Krauze, and Harijs Gricēvičs.
The issue of coins was the sole competence of the Ministry of Finance. 1, 2, 5, 10, 20, and 50 santims
and 1, 2, and 5 lats coins were also released into circulation. The designs on the coins were created by
three artists: Rihards Zariņš (santims minted in 1922 and 5 lats coins), Jānis Roberts Tilbergs (1 and 2
lats coins), and Ludolfs Liberts (santims minted in 1937).
The Red Army occupied Latvia on 17 June 1940. On 5 August Latvia was incorporated into the USSR.
As of 10 October 1940 the Bank of Latvia was replaced by the Latvia Republican Office of the USSR
State Bank, part of the centralised bank system of the USSR. The USSR's monetary system was
gradually introduced in Latvia. Pursuant to a decision of the Council of People's Commissars of the
Latvian SSR of 25 November 1940, the conversion rate for the lats and USSR ruble was set as follows:
1 lats = 1 ruble. This marked the beginning of simultaneous circulation of two currencies – the lats and
the USSR ruble – in Latvia which lasted for four months. Without prior notice, the lats was withdrawn
from circulation on 25 March 1941. The USSR ruble became the only legal tender in Latvia.
In June 1941 the German army occupied Latvia. Right after the German troops entered Riga, the Bank
of Latvia resumed its operation, yet it did not regain the right to issue money. During the period of
German occupation, special monetary policy intended for occupied territories was implemented. Its
goal was to suppress and plunder these lands, releasing into circulation special banknotes. Along with
the occupation Reichsmark, the USSR ruble remained in circulation as legal tender. The conversion
rate of the ruble and Reichsmark was: 10 rubles = 1 Reichsmark.
After World War II, Latvia again became part of the USSR financial system. The USSR State Bank both
issued money and performed the functions of the Treasury, and the monetary system of the Latvian
SSR was completely under its control.
In 1987 the Latvia Republican Office of the USSR State Bank was renamed the Latvia Republican Bank
of the State Bank of the USSR, yet it did not become the state’s central and issuance bank.
On 2 March 1990 the Supreme Council of the Latvian SSR adopted the Resolution "On the Bank of
Latvia" stipulating that the Bank of Latvia be established (actually restored) in the Latvian SSR as the
central bank with the right to issue national currency. However, it was only after the adoption of the
Declaration on the Restoration of Independence of the Republic of Latvia of 4 May 1990 and the
collapse of the USSR that the Republic of Latvia's Supreme Council passed the Resolution "On the
Reorganisation of Banks in the Territory of the Republic of Latvia" of 3 September 1991 which made
the Bank of Latvia a real central and issuance bank. The Republic of Latvia's Laws "On Banks" and "On
the Bank of Latvia", adopted on 19 May 1992, provided the definitive consolidation of the status of
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This material has received European Union co-funding
within the grant agreement Communication activities in
connection with the introduction of the euro in Latvia.
the Bank of Latvia as a central bank with whom the right to issue the national currency had been
vested.
On 31 July 1990 the Republic of Latvia's Supreme Council passed the Resolution "On the Programme
for Establishing the Monetary System for the Republic of Latvia". The Bank of Latvia began reestablishing the national currency of Latvia. In order to prepare for issuing stable national currency –
the lats, inflation had to be reduced. The USSR ruble was no longer suitable for this purpose; a
temporary currency had to be created. The Republic of Latvia's Monetary Reform Committee was
established. On 4 May 1992 the Committee made a decision to put into circulation the Bank of
Latvia's provisional currency, the Latvian ruble. The nominal value of this currency was 1, 2, 5, 10, 20,
50, 200, and 500 rubles (artist Kirils Šmeļkovs).
On 13 March 1991 the Republic of Latvia's Supreme Council passed the Resolution "On Producing the
Banknotes and Coins of the Republic of Latvia". The Council of Ministers and the Bank of Latvia were
assigned the task of developing a programme for producing the new paper banknotes and coins, as
well as ensuring its financing. The Commission for the Thematic Concept of the Banknotes and Coins
of the Republic of Latvia comprising 10 members was also established by the above decision.
In September 1991 the Bank of Latvia signed its first contract with the German company Gieseke &
Devrient GmbH in Munich for printing 5 lats banknotes; the first contract for minting coins was signed
with the Bavarian mint Bayerisches Hauptmuenzam in March 1992.
Paper banknotes bear the symbols of the Latvian environment and culture: an oak tree (5 lats), the
Daugava River (10 lats), a Latvian homestead (20 lats), a sailing ship (50 lats), a portrait of Krišjānis
Barons (100 lats), and a portrait of a Latvian folk-maid (500 lats) which depicts the reverse image on
the 5 lats coin designed by Rihards Zariņš and minted in 1929, 1931, and 1932. Over the last six
decades, this profile has become a symbol of Latvian identity. It can be seen in the watermark of all
banknotes issued in 1992.
In these designs, the lats banknotes symbolically depict the path of the Latvian nation through the
course of time. This path began under the holy oaks on the shores of the Daugava River; then it
winded through carefully tended Latvian homesteads to Riga, developing it into a Hanseatic city; and
finally it led the Latvian people towards awakening and freedom. The dominant vertical element in
these banknotes is composed of fragments from the Lielvārde belt, combined with a mark of the
note's nominal value. The motifs on the banknotes' reverse side characterise the rhythm of life and
work shared by our forefathers, as well as the atmosphere of our festive moments. One can see
woodcarvings on a distaff (5 lats), an ancient Latvian bow-brooch (10 lats), fragment of a traditional
ornament used in weaving (20 lats), the historic seal of the city of Riga (50 lats), the Lielvārde belt
ornament (100 lats), and ornaments of a bronze head-dress (500 lats).
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This material has received European Union co-funding
within the grant agreement Communication activities in
connection with the introduction of the euro in Latvia.
The symbols of santims and lats coins are characterised by ascetic simplicity. As opposed to the lats
coins minted in 1924–1926 where the artist Jānis Roberts Tilbergs chose the palm branch motif,
popular in Europe at the time but uncharacteristic of Latvia, the artists Gunārs Lūsis and Jānis
Strupulis chose elements symbolizing Latvian way of life and values. The ethnographic diamondshaped symbol of the sun as the companion of the person throughout his/her life is depicted on 1, 2,
5, 10, and 20 santims coins. Other coins feature symbols of the basic elements of the existence of the
Latvian nation: a pine tree seedling representing the woods on the reverse of the 50 santims coin, a
salmon representing the waters on the one lats coin, and a cow representing the land on the two lats
coin.
In early 1993 the situation was favourable for the changeover from the Latvian ruble to the Latvian
nation currency, the lats, and on 5 March 1993 the first 5 lats paper banknotes were put into
circulation. Gradually 10, 20, 50, 100 and 500 lats banknotes were released into circulation, as well as
coins in the denominations of 1, 2, 5, 10, 20, and 50 santims and 1 and 2 lats.
The successful monetary reform allowed the national currency in Latvia to regain the functions lost in
previous years. The successful progress of the monetary reform and the introduction of the lats
created preconditions for the accumulation and circulation of capital, as well as the transition to the
market economy.
According to: Ducmane, K., Vēciņš, Ē. Nauda Latvijā (Money in Latvia). Rīga : Latvijas Banka, 1995. 291 pp., and Karnups, V.P., Puriņš, Ā.,
Krūmiņš, G. et al. The Bank of Latvia XC. Riga : Bank of Latvia, 2012. 320 pp.
4
This material has received European Union co-funding
within the grant agreement Communication activities in
connection with the introduction of the euro in Latvia.