2015-01-01
On 1 January 2015, at midnight, Lithuania adopted the single European currency, the euro, becoming the nineteenth member of the euro area. The technical changeover to the single currency is going smoothly.
“The banking system demonstrated its well-preparedness for the euro adoption. Most ATMs are already issuing euro, payment card settlements are also taking place successfully. I would like to thank the staff of banks and the Bank of Lithuania, collectors and all others who ensured a successful start in using the euro,” said Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania.
Vitas Vasiliauskas. Photo by Dainius Labutis (ELTA)
Lithuania’s commercial bank ATM network was turned on half an hour after midnight. The operational interruptions for payment cards and POS-terminals were also brief; they were planned so as to cause as little as possible inconvenience for the population, while a large part of POS-terminals operated without any interruptions. The first payment card settlements were recorded several seconds after midnight.
Banks are intensively renewing also electronic banking operations. At some banks it is already possible to check account balances, perform payments and other daily operations. Commercial banks foresee that the functioning of internet banking should be completely restored by 2 January.
In turn, the Bank of Lithuania is successfully performing switching of the retail payment service, through which banks transmit their customers’ fund transfers to other bank customer accounts, to an improved system that processes payments in euro. Over the last three days of 2014 this system processed a record number of payments in litas — 0.7 million payments, i.e. 2–3 times more than usual. As of tomorrow, the system will be prepared to process payments in euro in a new regime, convenient for bank customers, of more frequent clearing: more than nine hourly clearings will take place instead of four ones like last year. In addition, the system will work longer — until 17:00.
“Having improved the payment system and by compacting clearing, simple bank customer transfers in euro from one bank to another already tomorrow will take place within less than an hour, while payments in euro will become significantly cheaper as the rates will decrease to the level of former domestic transfers in litas,” said the Chairman of the Board of the Bank of Lithuania.
By 31 December commercial banks received EUR 620.8 million from the Bank of Lithuania — a part was frontloaded to business entities, which assumed the responsibility to secure the new currency up to the euro adoption date and not issue it into circulation. In total, over 10 thousand businesses participated in the frontloading, of which — more than 2,000 small enterprises received the euro under the simplified procedure.
Free of charge exchange of litas to euro also begins today. In all counties today litas will be exchanged to euro by 40 commercial bank branches, while the Bank of Lithuania’s cash offices in Vilnius and Kaunas began operating at 12:00.
At the Lithuania Post and some credit unions, as of 2 January, litas will be exchanged to euro at a fixed exchange rate — 3.4528 litas for one euro — free of charge for two months, at commercial banks — for half a year, and at some commercial bank branches — all year. The Bank of Lithuania will exchange litas into euro free of charge for an unlimited period of time.
“The whole network of exchange locations amounts to almost 700 exchange spots, covering the whole territory of the country; a lot of time is planned for the exchange,” notes V. Vasiliauskas.
He positively assesses the fact the public actively prepared for the euro adoption. The population more often is choosing electronic payment means, by depositing cash savings into bank accounts, the amount of cash in circulation rapidly decreased. On 31 January, LTL 5.81 billion was left in circulation, 51 per cent less than at the beginning of 2014.
Prior to the euro adoption, almost 900 thousand Lithuanian euro coin starter kits were successfully distributed to the public, creating the opportunity to become acquainted with the country’s new currency.
Including the distributed starter kits, currently there are about EUR 0.62 billion in circulation, which amounts to almost 28 per cent of the amount of cash in circulation — EUR 2.34 billion. Of this, the equivalent value of EUR 1.68 billion is in litas.
Public surveys confirm that up to the euro adoption most of Lithuania’s population felt well or well enough informed on the euro, had used them in settlements, could indicate euro security features. The results of the newest Eurobarometer survey show that the euro is supported by 63 per cent of the population.
Last New Year’s night, from midnight until about 10:00, the free of charge euro phone line 8 800 34528 and the Bank of Lithuania’s special line received only several dozen phone calls from Lithuania’s public. They were mostly interested in where and when litas could be exchanged to euro, whether the exchange amount is unlimited, they asked other practical exchange questions.