UPDATE: Latvia changed its currency to the euro on Jan 1st 2014.

Presumably, as was the case in Estonia three years ago there will be a relatively brief transition period when both old (lats) and new (euros) currencies are accepted, with prices given in both, and lats will remain changeable to euros at banks for some time. Perhaps travellers to Latvia in January 2014 could advise.

 (previous advice from 2013 below)

Although Latvia is now a member of the European Union, it has not yet met the convergence criteria necessary to convert to euros. The national currency is the lat (LVL 1 = 100 santims). In 2005, the peg rate of lat to euro was set at 1 EUR = 0.702804 LVL (and it remains close at 0.69435 with an economy described as “overheated.”) GDP growth last year was 11.6%. Inflation this spring has been at 6%, and fear exists that the currency may have to be devalued.

As of July 1, the exchange rate was 1 LVL = $2.02 U.S. dollars (approx. $2 for every lat is easy to remember.)  With 100 santims to 1 lat, the coins are 1, 2, 5, 10, 20, and 50 santims, and 1 and 2 lats. Bank notes come in denominations of 5, 10, 20, 50, 100, and 500 lats.

The rate for pounds sterling stands at (approx) 93 Santims = £1, or as a useful rule of thumb, about 1LVL to £1 sterling.

To convert currency, look for booths marked “Valūtas maiņa,” but always check the posted buying and selling rates before exchanging. There are usually booths at the airport between the arrival gate and customs. Hotels, most restaurants, and shops generally accept Visa and MasterCards. There are many ATM machines (called “Automats” by the Latvians) throughout the city including 4 at the airport and 1 in the lobby of many hotels. ATMs are the most convenient way to change money and give the best rates. Traveler’s checks can be cashed at many banks.