Residents of Latvia were given a month and a half to adapt to the new currency: until January 14, Latvians will still be able to pay with the familiar lats, but they will receive change in euros at the rate of 0.702804 lats per 1 euro. And prices in stores will be indicated in two currencies for a full six months – to make it easier for shoppers to orient themselves.
Analysts believe that the introduction of the euro in Latvia may contribute to more active economic development of both Latvia and the eurozone. For example, new lending mechanisms are now available for Latvia, and repaying international loans will be easier as there will be no currency exchange losses. Moreover, although Latvia demonstrated GDP growth of 5.6% last year (the best indicator in Europe), its economy still needs support, and joining the larger pan-European economy should help it.
As for the eurozone, the European economy is currently in a recovery phase and is showing quite good indicators, indicating that the region is successfully overcoming the acute period of the crisis. The accession of a new state shows that the eurozone deserves trust, and this, in turn, may contribute to increased investor interest in it.
Nevertheless, residents of Latvia have mixed feelings about the introduction of the euro. According to a survey conducted in December, only 8.1% of Latvians prefer the single currency, while 50% of respondents opposed the abolition of the lats. Of these, 27.5% described their attitude towards the euro as "definitely against", and 22% were slightly less skeptical of the new currency. The reason for this reaction is fears of price increases, although Latvian authorities claim that this will not happen.
Based on materials from «Forex MMCIS group».