Lithuania, the southernmost and largest of the three Baltic states, has a rich and complex history, particularly concerning its currency. Before adopting the euro in 2015, Lithuania experienced several monetary transitions, each reflecting significant political and economic shifts.
Lithuania declared its independence on March 11, 1990, and the new Soviet parliament acknowledged this independence on September 6, 1991. In 2004, Lithuania was admitted into the European Union (EU) and the North Atlantic Treaty Organization.
The First Litas (1922-1941)
The first litas was introduced on October 2, 1922, replacing the ostmark and ostrubel, which had been issued by occupying German forces during World War I. The litas was established at a value of 10 litų = 1 US dollar and was subdivided into 100 centų.
In the face of the worldwide economic depression, the litas appeared to be quite a strong and stable currency, reflecting the negligible influence of the depression on the Lithuanian economy. One litas was covered by 0.150462 grams of gold stored by the Bank of Lithuania in foreign countries. In March 1923, the circulation amounted to 39,412,984 litas, backed by 15,738,964 in actual gold and by 24,000,000 in high exchange securities.
It was required that at least one third of the total circulation would be covered by gold and the rest by other assets.
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Changes due to World War II
In March 1939, Nazi Germany demanded that Lithuania give up the Klaipėda Region. On the same day, the reichsmark replaced the litas as the official currency of the region, with 1 litas being exchanged for 40 pfennig.
The litas was replaced by the Soviet ruble in April 1941 after Lithuania was annexed by the Soviet Union, with 1 litas equal to 0.9 ruble, although the actual value of the litas was about 3 to 5 rubles. Such an exchange rate provided great profit for Soviet military and party officials. Withdrawals were then limited to 250 litų before the litas was completely abolished.
Reintroduction of the Litas (1993)
The litas was reintroduced on June 25, 1993, following a period of currency exchange from the Soviet ruble to the litas with the temporary talonas then in place. The name was modeled after the name of the country (similar to Latvia and its lats).
Officials started to prepare for the introduction of the litas even before independence was declared, it was thought to introduce the litas alongside the ruble even if Lithuania remained a part of the Soviet Union. In December 1989, artists were asked to submit sketches of possible coin and banknote designs. The Bank of Lithuania was established on March 1, 1990. Ten days later, Lithuania declared its independence from the Soviet Union.
At first, the Lithuanian government negotiated in vain with François Charles Oberthur, a printing company located in France to print the banknotes. In November 1990, the Bank of Lithuania decided to work with the United States Banknote Corporation (now American Banknote Corporation). In November 1991, the Currency Issue Law was passed and the Litas Committee was created.
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Officials waited for a while for the economy to stabilise so as not to expose the young litas to inflation. About 80% of Lithuania's trade was with Russia and the government needed to find a way to smooth the transition away from the ruble zone.
At first, Lithuania did not have gold or any other securities to back up the litas. First, it sought to recover its pre-war gold reserves (about 10 tonnes) from France, the United Kingdom, Switzerland, etc. In the interwar period Lithuania stored its gold reserves in foreign banks. After the occupation in 1940 those reserves were deemed "nobody's": there was no Lithuania and most Western countries condemned the occupation as illegal and did not recognise the Soviet Union as a successor.
On 25 June 1993, the litas was finally introduced at the rate of 1 litas to 100 talonas. Even the introduction of the litas was followed by a scandal. The government allowed the changing of unlimited amounts of talonas to the litas without having to show the source of the talonas. In July, circulation of the talonas was stopped and on 1 August 1993, the litas became the only legal tender.
The talonas was never really trusted by the people and the ruble was very unstable. Another alternative was the German mark, but it was not available in larger quantities. Due to poor banknote quality (both talonas and early litas) it was easy to counterfeit them. Most shops were forced to acquire ultraviolet lamps to check for forgeries.
Currency Details
The Lithuanian litas (ISO currency code LTL, symbolized as Lt) was the currency of Lithuania, until January 1, 2015, when it was replaced by the euro. It was divided into 100 centų (singular centas).
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Coins
Coins were introduced in 1925 in denominations of 1 centas, 2 centai, 5 centai, 10, 20, 50-centų, and 1 litas, 2, 5-litai, with the litas coins in silver. 10 litų coins were introduced in 1936. All these coins were designed by the sculptor Juozas Zikaras (1881-1944).
In 1993, coins were introduced (dated 1991) in denominations of 1 centas, 2, 5 centai, 10, 20, 50-centų, and 1 litas, 2, 5 litai. The 1 centas, 2, 5 centai pieces were minted in aluminium, the 10, 20, 50-centų in bronze and the litas coins were of cupro-nickel. In 1997, nickel-brass 10, 20, 50-centų coins were introduced, followed by cupro-nickel 1 litas, bimetallic 2 and 5 litai in 1998.
Banknotes
In 1922, the Bank of Lithuania issued notes in denominations of 1 centas, 2 centu, 5 centai, 10, 20, 50-centų, and 1 litas, 2 litu, 5 litai, 10, 50, 100 litų. In 1924, 500 and 1000 litų notes were added.
In 1993, banknotes (dated 1991) were issued in denominations of 1 litas, 2, 5 litai, 10, 20, 50, 100 litų. Due to poor designs, these were found to be easily copied and a second series of notes was swiftly introduced in denominations of 1 litas, 2, 5 litai, 10, 20, 50 litų, with only the 100 litų notes of the first series remaining in circulation.
Pegging to the US Dollar and Euro
Initially, the litas was pegged to the U.S. dollar at the rate of 4 to 1. On February 2, 2002, the litas was pegged to the euro at a rate of 3.4528 to 1 (1 LTL = 0.28962 EUR); this rate was not expected to change - and indeed did not - until the litas was completely replaced by the euro on January 1, 2015.
The main reasons for this fixation was little trust in the emerging monetary system, fear of high fluctuations in currency exchange rates, desire to attract foreign investors, and International Monetary Fund recommendations.
Road to Euro Adoption
After the peg, Lithuania became a member of the Eurozone de facto. The litas became part of the ERM II on 28 June 2004. Lithuania postponed its euro day several times, since the country did not meet the convergence criteria.
High inflation-which reached 11% in October 2008, well above the then acceptable limit of 4.2%-contributed to Lithuania's failure to meet the criteria.
When Prime Minister Algirdas Butkevičius presented his new government in December, eurozone accession as soon as possible was mentioned as one of the key priorities for the government. The Prime Minister said: "January 2015 is a feasible date.
According to figures from the Bank of Lithuania, Lithuania had met 4 out of the 5 criteria by October 2013, the exception being the government deficit of 3.2% of GDP, exceeding the limit of 3.0%. In April 2014, the European Parliament's Committee on Economic and Monetary Affairs gave their preliminary consent for Lithuania to join the eurozone on 1 January 2015, having concluded that the country was complying with all the criteria according to economic data from the first months of 2014.
When Lithuania Switched To The Euro - 3 Minute History
Lithuania's parliament approved a euro changeover law in April 2014, and in their biennial reports released on 4 June the European Commission found that the country satisfied the convergence criteria.
Euro Adoption and Public Opinion
A poll by Eurobarometer in April 2013 found that 41% of Lithuanians supported switching to the euro, while 55% were opposed. Lithuania officially joined the eurozone at midnight on the morning of 1 January 2015, with the Lithuanian Central Bank offering an exchange rate of 3.4528 LTL to one euro.
Immediately after the start of the New Year, Prime Minister Butkevicius made the country's first cash withdrawal in euros. It was reported that nearly all of the nation's cash machines would be dispensing euros within 30 minutes of the New Year.
Lithuanian Euro Coins
The designs of the Lithuanian coins share a similar national side for all denominations, featuring the Vytis symbol and the name of the country, "Lietuva." The design was announced on 11 November 2004 following a public opinion poll conducted by the Bank of Lithuania. It was created by the sculptor Antanas Žukauskas.
The only difference between the coins is that the one and two euro coins have vertical lines on the outer circle, the fifty, twenty and ten cent coins have horizontal lines on the outer circle, and the five, two and one cent coins have no lines on the outer circle. In January 2014 it was announced that all coins will have "2015" minted on them to display the year of Lithuania's euro adoption.
Inflation and Currency Value Over Time
The transition from the Lithuanian Litas to the Euro, like many currency transitions, has implications for inflation and the real value of money over time. Here's a look at how inflation has affected the Euro's buying power in Lithuania since 1991:
Inflation from 1991 to 2024
- Cumulative price change: 44,448.95%
- Average inflation rate: 20.30%
This significant inflation rate means that €100 in 1991 is equivalent in purchasing power to about €44,548.95 in 2024.
Lithuania inflation since 1991 (Annual Rate, OECD and World Bank CPI)
| Year | Euro Value | Inflation Rate |
|---|---|---|
| 1991 | €100.00 | 121.24% |
| 1992 | €1,120.62 | 1,020.62% |
| 1993 | €5,720.23 | 410.45% |
| 1994 | €9,853.36 | 72.25% |
| 2022 | €40,261.82 | 19.71% |
| 2023 | €43,896.97 | 9.03% |
| 2024 | €44,548.95 | 1.49% |
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