By Sandra L. Medearis
RIGA – The amount of cash in circulation increased to 380.5 million lats ($680.8 million) at the beginning of July, a jump of 23 percent, Bank of Latvia spokesman Edzus Vejins said July18. On July 20, some of the cash circulated in bigger chunks when the Bank of Latvia issued the 500-lat note.
The traditional Latvian maid of the water has come out of hiding to adorn the face of the 500-lat note that is being issued in response to a demand for more bills of higher denomination and fewer five- and 10-lat notes, Vejins said.
Latvia's central bank decided to put the large denomination bill into circulation to complete monetary reform that started in 1992 when the bank issued Latvian rubles. Latvian notes - five, 10, 20, 50, 100 and 500 lats - were printed in Germany in 1992. In March 1993, five-lat notes entered circulation, and other bank notes of higher value came along gradually with 50 and 100lat bank notes introduced in May 1994.
Analysis of bank note circulation proves that the call for notes of higher value is growing while the demand for smaller denominations is shrinking. During the year, the number of five-lat notes in circulation has decreased by 8 percent, Vejins said.
J. C. Cole, head of the U.S. Chamber of Commerce in Riga, said that while the business group is happy to see the large denomination bill as a sign of continued Latvian economic progress, the champagne corks aren't popping.
"The new note marks the completion of Latvia's currency reform, certainly a milestone, but it isn't significant except that it is a larger denomination, just as the U.S. has its $1,000 bill," Cole said.
Imbra Gimmele at Hansabank headquarters said the bills will not present a logistical problem within banks and that the relatively small number will be handled along with the 100-lat notes.
For many Latvians, three months' wages will fit inside one 500-lat note. For American consumers in Latvia, one of the big bills would cost about $813 on the day it was issued.
Examination of the note will reveal similarities with other denominations of lat notes, with the same safeguards against counterfeiting, plus one.
The 500-lat note has special ink that appears to change color depending on the angle from which it is viewed. This ink appears in the letters showing the nominal value of the bill in the left-hand corner on the face of the note.