LIETUVOS RESPUBLIKOS

LIETUVOS RESPUBLIKOS Translation from Lithuanian REPUBLIC OF LITHUANIA LAW ON THE CREDIBILITY OF THE LITAS 17 March 1994 No I-407 (As last amended on 05 April 2001 – No IX-236) Vilnius Article

1. Ensuring the Credibility of the Litas The litas put into circulation by the Bank of Lithuania shall be fully covered by gold and the foreign exchange reserves of the Bank of Lithuania. Article
2. Amount of the Litas in Circulation The Bank of Lithuania shall guarantee that the total amount of the litas put into circulation does not exceed at any time the gold holdings (at market prices) and the foreign exchange reserve (according to the official exchange rate of the litas) of the Bank of Lithuania. The total amount of the litas put into circulation shall comprise: 1) banknotes and coins in circulation; 2) the sum of credit balances in the litas-denominated accounts held by other banks and account holders with the Bank of Lithuania; 3) the sum of securities and other promissory notes of the Bank of Lithuania in litas. The foreign exchange reserve shall consist of: 1) the banknotes and coins of convertible currency held by the Bank of Lithuania; 2) the amount of convertible currency held by the Bank of Lithuania in correspondent accounts in foreign banks and the International Monetary Fund; 3) the promissory notes, certificates of deposits, bonds and other debt securities held by the Bank of Lithuania and payable in a convertible currency. The Bank of Lithuania may change the total amount of the litas in circulation only by respectively changing the available holdings of gold and the foreign exchange reserve. Article
3. Official Exchange Rate of the Litas The official exchange rate of the litas shall be established against the currency chosen as the anchor currency. The anchor currency and the official exchange rate of the litas shall be established by the Bank of Lithuania upon coordination with the Government of the Republic of Lithuania. Solely under extraordinary circumstances, when further preservation of the established exchange rate of the litas would have a destructive effect on the stability of the national economy, the Bank of Lithuania may, upon co-ordination with the Government of the Republic of Lithuania, alter the anchor currency and/or the official exchange rate of the litas. Article
4. Exchange of the Litas The Bank of Lithuania shall guarantee, to the extent of its gold holdings and the foreign exchange reserve, a free exchange of the litas specified in the second paragraph of Article 2 to the anchor currency according to the official exchange rate of the litas, as well as free exchange of this currency to the litas within the territory of the Republic of Lithuania. Other foreign currencies shall be exchanged to the litas and the litas shall be exchanged to other foreign currencies within the territory of the Republic of Lithuania at the market rate. The maximum amounts of exchange operation fees shall be established by the Bank of Lithuania for all banks. Commercial banks shall be liable under the law for a failure to comply with the procedure for conducting exchange operations. Article
5. Information on the Litas The Bank of Lithuania shall, at least once a month, publish information on the total amount of the litas in circulation, the available gold holdings and the foreign exchange reserve in the official gazette Valstybės žinios. Article
6. Entry into Force of the Law This Law shall enter into force on 1 July
7. Article
8. Validity of the Law on the Bank of Lithuania and the Statute of the Bank of Lithuania The Law on the Bank of Lithuania and the Statute of the Bank of Lithuania shall be valid until the adoption of a new Law on the Bank of Lithuania and to the extent that they do not contradict the provisions of this Law. Article
9. Peculiarities of Selection of the Euro as the Anchor Currency and Establishment of the Official Exchange Rate of the Litas Paragraph 3 of Article 3 of this Law shall not apply when the euro is selected as the anchor currency and the official exchange rate of the litas is established according to the exchange rate between the euro and the previous anchor currency on the currency market. I promulgate this Law passed by the Seimas of the Republic of Lithuania. PRESIDENT OF THE REPUBLIC ALGIRDAS BRAZAUSKAS ___________________ Translated by A. Kiudulaitė alkiud@lrs.lt