2014-10-06
The Bank of Lithuania kicked off the frontloading of euro cash to commercial banks
The first batch of the Lithuanian euro coins left the vault of the Bank of Lithuania today. It is designated to one commercial bank, which was the first to take 2-euro coins for EUR 45 thousand.
“The frontloading of euro cash to commercial banks has been started according to schedule. The first to start was a small bank, which takes small quantities of euro coins. Shortly the large banks will get involved in this process too. We hope for immediate acquisition of euro banknotes by commercial banks as well, when we will kick off their frontloading in early November,” says Marius Jurgilas, member of the Board of the Bank of Lithuania.
The Bank of Lithuania, having estimated the requirement and coin stocks, has projected to mint 370 million pieces of euro coins this year and in the next one. 110.8 million pieces of euro coins have already been delivered to the Bank of Lithuania's vaults — more than half of a total of euro coins projected to be minted at the Lithuanian Mint (217 million pieces).
The 132 million of euro banknotes necessary for the euro adoption the Bank of Lithuania will borrow from the Central Bank of Germany, Bundesbank. The euro banknotes will be delivered to the Bank of Lithuania’s vaults in October–November 2014.
For the euro frontloading to take place, the Bank of Lithuania and commercial banks have signed euro frontloading agreements. Commercial banks must provide to the Bank of Lithuania eligible collateral for the euro banknotes and coins frontloaded: funds on bank accounts with the Bank of Lithuania, debt securities or time deposits with the Bank of Lithuania.
It is foreseen that from 1 December 2014 until the euro adoption date commercial banks and their authorised cash in transit companies will begin the sub-frontloading of euro. During this time commercial banks will provide the new currency to retail trade and service providing businesses, Lithuania Post, credit unions that will exchange litas into euro as well as any other subjects that have the need to be provided with euro beforehand.
The euro received during the frontloading, from the euro adoption date, 00.00, will become currency in circulation, and commercial banks and enterprises will start using it as legal tender.