Cash circulation

Securing cash circulation

While non-cash payments are on the rise in Latvia, cash remains a popular choice for purchases made by the population. The data from a public survey suggest that the average person makes four cash payments a week. Therefore, one of the primary tasks of Latvijas Banka remains ensuring cash circulation. Furthermore, cash payments are critical financial services, and the National Security Law stipulates that the availability of them must be ensured in the event of a national security threat.

The net issuance of euro banknotes by Latvijas Banka continued to decline and remained negative in 2024. Meanwhile, the net issuance of euro coins by Latvijas Banka increased. Thus, at the end of 2024, the total net issuance of euro banknotes and coins of Latvijas Banka was –503.7 million euro.

Chart 1. Net issuance of euro banknotes and coins by Latvijas Banka

In 2024, the net issuance of euro banknotes by Latvijas Banka increased by 0.5% in terms of volume (to 69.3 million banknotes). At the end of 2024, the 50 euro and 20 euro banknotes issued by Latvijas Banka were most frequently found in circulation.

Meanwhile, the net issuance of euro coins by Latvijas Banka increased by 4.7% in volume, reaching a total of 498.7 million coins in December. Of the coins issued by Latvijas Banka, 1 cent and 2 cent coins accounted for the largest volumes in circulation at the end of 2024.

Chart 2. Net issuance of euro banknotes by Latvijas Banka (by nominal value; 2014–2024; volume; millions)

Chart 3. Net issuance of euro coins by Latvijas Banka (by nominal value; 2014–2024; volume; million)

The cash received from credit institutions was checked for fitness and authenticity by the automated cash processing systems of Latvijas Banka. They processed 146.8 million banknotes in 2024, which was an increase of 4.0% from 2023. Of the banknotes processed, 6.9% or 10.1 million were identified as unfit for circulation and destroyed.

In 2024, Latvijas Banka continued to register and monitor cash handlers, which are merchants that engage in handling and recirculating euro banknotes and coins. At the end of 2024, 32 cash handlers had been registered in Latvia. Latvijas Banka conducted inspections by assessing how well operations of these merchants comply with the requirements in the laws and regulations governing cash handling. Six such inspections were carried out in 2024.

The withdrawal of lats banknotes and coins from circulation continued in 2024. The value of lats banknotes and coins withdrawn from circulation by Latvijas Banka over the year totalled 0.5 million lats (0.4 million lats in banknotes and 0.1 million lats in coins). Lats banknotes worth 38.6 million lats and coins worth 43.7 million lats were still in circulation at the end of 2024. At the end of the reporting year, the highest number of banknotes in circulation consisted of the 5 lats and 20 lats denominations, amounting to 1.7 million and 0.7 million respectively, while the most numerous coins in circulation were the 1 santim and 2 santim coins, totalling 149.2 million and 89.3 million respectively.

In 2024, Latvijas Banka initiated and drafted amendments to the Credit Institution Law, which were subsequently adopted by the Saeima on 19 September 2024. These amendments to the law required the credit institutions concerned to ensure the availability of cash withdrawal services based on a set of defined criteria. In addition, Latvijas Banka developed and adopted Regulation No 330 Regulation on the Management of the Cash Withdrawal Service on 28 October 2024, which established the numerical values of the requirements referred to in Section 73.¹, Paragraphs two and three of the Credit Institution Law regarding the distance to ATMs, their number, operating hours, the monthly limits on cash withdrawals from ATMs, and the number of cash withdrawals, as well as the conditions for the application of these requirements.

Section 73.¹, Paragraph six of the Credit Institution Law stipulates that Latvijas Banka is obliged to assess and review the requirements regarding the availability of ATMs at least twice a year – the distance to ATMs, their number, operating hours, as well as restrictions on cash withdrawal services, including the monthly limit and the number of withdrawals. This review process takes into account changes in demand for cash withdrawal services, the availability of solutions in the market, alternatives, and Latvijas Banka's assessment of the adequacy of the cash withdrawal service infrastructure to accommodate situations where there is a rapid increase in demand. This approach will enable Latvijas Banka to effectively monitor and adjust requirements, ensuring that credit institutions provide timely and high-quality access to cash for the population.

In 2024, 14.1 million coins were deposited by individuals and businesses in the cash deposit machines installed at the Riga branch of Latvijas Banka.

Execution of functions of the National Analysis Centre and the Coin National Analysis Centre

Latvijas Banka serves as the national competent authority tasked with protecting the euro against counterfeiting and carrying out the functions of detecting and analysing counterfeit banknotes and coins. To fulfil these functions, the National Analysis Centre and the Coin National Analysis Centre have been established within the Cash Department of Latvijas Banka.

The main task of the National Analysis Centre is to identify, analyse, record, and store all the counterfeit banknotes and coins submitted to Latvijas Banka, thus ensuring that the required measures are implemented in addition to reinforcing coordinated anti-counterfeiting efforts in the EU.

In 2024, Latvijas Banka identified 593 counterfeit euro banknotes and 711 counterfeit euro coins in circulation.

Compared to 2023, the number of counterfeit banknotes decreased by 9% in 2024, while the number of counterfeit coins increased by 20%.

In 2024, the number of counterfeit euro banknotes in circulation remained low, with 3 counterfeit banknotes per 10 000 inhabitants.

Chart 4. Number of counterfeit banknotes identified in circulation in Latvia per 10 000 inhabitants

20 euro and 50 euro banknotes remain the denominations counterfeited most. In 2024, they accounted for 66% of all counterfeit euro banknotes detected in circulation.

Chart 5. Counterfeit euro banknotes identified in circulation (%)

Number of counterfeit euro banknotes identified by Latvijas Banka by nominal value

The majority of counterfeit euro coins identified are of the 2 euro denomination. In 2024, the share of counterfeit 2 euro coins reached more than 90% of all coin counterfeits detected.

Chart 6. Counterfeit euro coins identified in circulation (%)

Number of counterfeit euro coins identified by Latvijas Banka by nominal value

Although the number of counterfeit coins detected in circulation increased compared to 2023, the incidence of euro coin counterfeiting in Latvia remained consistently low in 2024, with 4 counterfeit coins per 10 000 inhabitants.

The widespread circulation and high value of euro banknotes continue to make them an attractive target for counterfeiters. However, nearly 40% of the counterfeit euro banknotes detected in 2024 were low-quality counterfeits featuring altered designs with clear deviations in size, colour tone, and discrepancies in the depiction of image elements, while also lacking any imitation of the banknotes' security features.

On the other hand, high-quality counterfeits are predominantly found among the higher denominations, specifically the 200 euro and 500 euro banknotes. Their number remains relatively stable over time, constituting less than 3% of the total number of counterfeit euro banknotes in circulation in 2024.

To protect oneself from counterfeits and prevent financial loss due to the acceptance of counterfeit banknotes, it is essential to carefully examine the banknotes, for instance, by employing the FEEL, LOOK, TILT method. It is important for individuals who use cash in their daily transactions to be familiar with the design and security features of banknotes and coins.

Euro commemorative and collector coins issued by Latvijas Banka in 2024

In 2024, Latvijas Banka issued five collector coins. They were "Across the Times", issued on 16 April 2024; "Childhood Joy", issued on 4 July 2024; "Energy Coin", issued on 26 September 2024; "Building the Unbuilt", issued on 17 October 2024; and "Cabbage", issued on 16 December 2024). A 2 euro commemorative coin "Puzuris" (in circulation since 21 November 2024) in rolls and gift packaging, as well as a set of circulation coins "Puzuris" (in circulation since November 2024) was also issued in 2024.

Latvijas Banka invites various Latvian artists to participate in coin design competitions, making each coin a unique work of art. Coin themes are selected based on their relevance, with the aim of promoting Latvian cultural values and drawing attention to contemporary societal issues.

In 2024, the public survey organised by Latvijas Banka in cooperation with the portal Delfi.lv received over 31 000 votes, in which the collector coin "Stardust" was awarded the title of Latvia's Coin of the Year 2023.