Historical Sketch

During the Great Nordic War of the early 18th, the Baltic came under Russian rule. In the First World War, Germany occupied the territory, which triggered the break away and subsequent independence of Estonia, Latvia, and Lithuania in 1918. It lasted only up to World War II. In 1940, the three Baltic states were occupied and annexed by the USSR and in the following year by Germany, together with the entire western part of the Soviet Union, which incorporated them into the "Reichskommissariat Ostland" (Eastern Land). In 1944 finally, the Red Army drove out the Germans, and Estonia, Latvia, and Lithuania became Soviet republics within the USSR again. During the decay of the Soviet Union in 1990, Lithuania began to build state structures, and after an attempted coup in January 1991, the parliament declared the restoration of the independent Republic of Lithuania.

Monetary History Overview

During First World War occupation of Russian territories in Poland and the Baltic States, the German military authorities for the "Territory of the Supreme Commander for the East" (Gebiet des Oberbefehlshabers Ost) mandated the Credit Bank for the East (Darlehnskasse Ost) in Poznan, Poland, with the issuance of banknotes in German Reichsmark. The usage of the so-called "East Mark" (Ost-Mark) was restricted to the occupied territories, and the notes were not convertible. Banknotes were also issued in Ruble denominations at half a Reichsmark, referred to as "East Ruble" (Ost-Rubel).

In 1918, Lithuania declared independence from Russia. In following February, the government decided the immediate separation from the inflationary Russian currency area. The Lithuanian Auksin was created as transitional currency. It replaced the Ost-Mark at par, and the paper money from the occupation period remained in circulation. The Kaunas branch of the Darlehnskasse Ost continued as acting currency institute. The Auksin was pegged to the German Reichsmark and followed its inflationary development. In October 1922, the Bank of Lithuania began operations, and the 1st Lithuanian Lit replaced the Auksin as national currency. It was pegged to the US Dollar and remained stable until the Soviet annexation of the Baltic states in 1940. The Soviet Ruble was introduced more or less at par with the Lit, and the Lithuanian currency got abolished in March 1941.

In 1991, Lithuania attained (second) independence. In September 1992, the Lithuanian Talon (Coupon) was introduced as a transitional currency, which allowed to stop the inflow of Russian and Soviet currencies. The Bank of Lithuania had already been re-established in 1990 when the State Bank of the USSR got nationalized. The Talon lost about 40% of its value during the nine months of its existence, and in June 1993, the transitional currency was replaced. Two zeros were cut, and the 2nd Lithuanian Lit became the new currency unit, initially pegged to the US Dollar. In 2002, the Lit got repegged to the Euro, and in 2014 finally, Lithuania joined the European Monetary Union and introduced the European Euro. The Lithuanian banknotes and coins were withdrawn in within two weeks.

Lithuania joined the International Monetary Fund (IMF) on 29.04.1992.

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