Latvia was originally divided into the smaller states of Livonia, Lettgallia and Courland. In the middle ages what is Latvia today formed part of the state of the Livonian branch of the Teutonic Order. With the introduction of the Lutheran Reformation in 1558, this state disintegrated, Courland becoming a Duchy under Polish sovereignty; the estates of Livonia also accepting Polish sovereignty. In 1621 most of Livonia became Swedish, while the extreme southeast, Lettgallia, remained Polish. Hanseatic German merchants ruled over Riga, which ruled over the hinterlands of Latvia. Livonia was annexed by Russia from Sweden on September 10, 1721; Lettgallia was annexed by Russia on September 30, 1773 as part of the second partition of Poland; and Courland-Semigallia was annexed by Russia on April 26, 1795. The Treaty of Brzecz-Litewski on March 3, 1918 ceded the Baltic States to Germany, and on April 2, 1918, the local German elite set up the Baltic State, but the Baltic State collapsed when Latvia declared its independence on November 18, 1918. In 1939, the Latvian government gave in to Stalin's demands and permitted Soviet troops to be stationed on Latvian soil on June 17, 1940. Latvia then gave in to another demand and formed a coalition government, taking in communist ministers. These then staged a coup, ousting the democrats, declared the country to be a people's republic and requested admission to the USSR, becoming the Latvian Soviet Socialist Republic on August 5, 1940. Germany occupied Latvia from July 1941 to October 1944 and made it part of Ostland (Estonia, Latvia, Lithuania, and parts of Belarus). The Republic of Latvia was formed on May 4, 1990 and declared its independence on August 21, 1991.
Polish money circulated in Latvia while it was part of Poland from 1561 until 1621. After Latvia became part of Sweden, Dalers Silvermynt (SED) and Riksdalers Specie (SES) circulated in Latvia.
Swedish Riksdaler were used in parts of Latvia through 1795. The Riksdaler was issued in silver (Daler Silvermynt-SES), copper and paper format with the exchange rates between the three fluctuating according to the value of silver, copper and the issue of paper banknotes. The Daler was used in Sweden until 1776. Two accounting systems were used in Sweden according to province with some systems based on silver money and some on copper money. The approximate values were 1 Daler equal to 6 Daler Silvermynt, 18 Daler Kopparmynt, 24 Mark, 48 Skilling, 192 Oere or 512 Oerlein. On November 27, 1776, Gustavus III unified the systems of accounting into a single system based upon silver money with 1 Riksdaler Specie (SES) equal to 48 Skilling or 192 Oere. Paper Daler (SEP) and Paper Riksdaler (SER) also circulated, though they usually traded at a discount to specie money.
After being incorporated into Russia, the Ruble was adopted as the medium of exchange in Latvia. Russia had reformed the Ruble (RUEI) under Elizabeth II on November 23, 1755, setting 1 Gold Imperial equal to 10 Silver Rubles or 1000 Copper Kopeks. Paper Assignatzia (Ruble-Banco) also circulated, though usually at a discount to specie money. The monetary system was reformed on July 1, 1839 with 1 Silver Ruble (RUES) set equal to 3.5 Ruble Assignatzia (RUEA). Credit Ruble Banknotes (RUEP) replaced the Ruble Assignatzia on June 1, 1843. Russia went on the Gold Standard on January 3, 1897 and introduced the Gold Ruble, which was used until the outbreak of World War I. The State Treasury and the State Bank (Gosbank) issued banknotes for Russia and the Soviet Union.
Germany occupied parts of Latvia during World War I, and Germany issued both Darlehnskasse Ost Rubles (DEOR), issued by the Ostbank fuer Handel and Gewerbe, and Darlehnskasse Ost Marks (DEOM), issued by the Darlehnskasse Ost, for use in occupied territories, with 1 Mark equal to 2 Rubles. Darlehnskasse Ost Marks were also used in the Baltic State.
After gaining its independence, Latvia issued the Latvian Ruble (LVB) at par with the Russian Ruble. The Lat (LVA) replaced the Latvian Ruble on August 3, 1922 at the rate of 1 Latvian Lat equal to 1 Franc Germinal or 50 Latvian Rubles. The Lat was divisible into 100 Santimi. Banknotes were issued by the Treasury and by the Latvijas Banka (Bank of Latvia). Latvia left the Gold Standard on November 28, 1936.
After the Soviet Union invaded Latvia, the Soviet Gold Ruble (SUG) was introduced as the medium of exchange. During German occupation, Latvia was made part of Ostland. Although a Central Bank for Ostland was established in Riga, no Ostland Marks were ever issued, and Reichskreditkassenschein, along with German Marks, circulated instead. After Latvia was reincorporated into the Soviet Union, a New Ruble (SUN) replaced the Gold Ruble on December 29, 1947 at the rate of 1 New Ruble equal to 10 Gold Rubles. On January 1, 1961, the Hard Ruble (SUR) replaced the New Ruble at the rate of 1 Hard Ruble equal to 10 New Rubles. The Ruble is divisible into 100 Kopeks. Under the Soviet Union, the State Treasury and by the State Bank (Gosbank) issued banknotes.
After Latvia declared its independence, it replaced the Russian Hard Ruble with the Latvian Ruble (LVR) at par on May 7, 1992. The Lat replaced the Ruble on June 28, 1993 at the rate of 1 Latvian Lat equal to 200 Latvian Rubles. Ruble banknotes were issued by the Government, and Lat banknotes are issued by the Latvijas Bankas. The Lat is divisible into 100 Santimi. |
