International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of June 30, 2004)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: May 3, 1994.
Exchange Arrangement
CurrencyThe currency of Lithuania is the Lithuanian litas.
Exchange rate structureUnitary.
Currency board arrangementThe litas is pegged to the euro at the rate of LTL 3.4528 per €1. On June 27, 2004, Lithuania adopted the ERM II of the EMS. However, the authorities still maintain the currency board arrangement without modification.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketAny natural or juridical person may enter into a forward exchange contract with a bank operating in Lithuania or in a foreign country without restriction.
Arrangements for Payments and Receipts
Prescription of currency requirementsThe payment system, payment instruments, and the relationship among the participants of the payment system in Lithuania are governed by the Law on Payments.
Use of foreign exchange among residentsThe euro may be used for domestic cash and noncash payments and settlements, and foreign exchange may be used for all noncash domestic settlements, provided that the parties involved agree thereto.
Payments arrangements
Bilateral payments arrangements
OperativeCorrespondent accounts exist between the Bank of Lithuania (BOL) and the central banks of the Baltic countries, Russia, and the other countries of the FSU. These accounts need not be used for payments originating after October 1992. There is an agreement between the BOL and the National Bank of Belarus.
InoperativeRuble-denominated correspondent accounts maintained with the central banks of the Baltic countries, Russia, and the other countries of the FSU have been closed and are in the process of being settled.
Administration of controlParliament has the legislative authority in foreign exchange and trade matters. A banking law has delegated to the BOL the authority to issue regulations governing foreign exchange transactions. All foreign exchange transactions involving domestic currency must be effected through authorized credit institutions licensed by the BOL. Authorized banks are allowed to transact among themselves, as well as with residents and nonresidents of Lithuania; the BOL may limit on a case-by-case basis the types of transactions that may be conducted.
International security restrictions
In accordance with UN sanctionsIn accordance with UN Resolution Nos. 1333 and 1373, sanctions are imposed against individuals, groups, and organizations associated with terrorism.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesImports and exports of domestic or foreign banknotes exceeding LTL 10,000 or its equivalent must be declared.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Approval requiredNatural and juridical persons must report the opening and closing of these accounts to the tax authorities.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyn.r.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Approval requiredApproval is required if the legislation of the other country requires approval.
Domestic currency accountsYes.
Convertible into foreign currencyThere is no distinction between resident and nonresident accounts in this regard.
Blocked accountsCertain accounts are blocked by government resolutions in accordance with UN Security Council resolutions.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresThere are no quantitative restrictions or licensing requirements on imports, except for health and national security reasons and as noted below. Certain food products, such as semiprocessed meat products, poultry, and fish, are subject to licensing.
Other nontariff measuresCertain agricultural goods and alcoholic beverages are subject to duties, and certain quantitative restrictions are used to protect Lithuania’s cultural heritage. Alcoholic beverages and tobacco, for which the licensing requirement was revoked on January 1, 2004, may be imported only by traders registered with the government, but import quantities are unrestricted. There are licensing requirements governing trade in strategic goods and technology and certain oil products.
Import taxes and/or tariffsA three-tier tariff structure exists, consisting of (1) a “conventional” rate applied to countries granted MFN status; (2) a “preferential” rate applied to countries with which Lithuania has a foreign trade agreement; and (3) an “autonomous” rate that is usually 5% higher than the MFN rate and is applied to all other countries. Imports entering under a majority of tariff lines are duty-free; and most other tariff lines carry duty rates of 20% or less; however, rates on agricultural products range as high as 87%. Some non–ad valorem duty rates remain in effect.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesThere are licensing requirements governing trade in strategic goods. There are also licensing requirements governing exports of certain oil products, but without quotas.
Without quotasYes.
With quotasYes.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsNo.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentForeign investments in the following areas are prohibited: (1) national security and defense, except for investments by foreign entities that meet the criteria for European and transatlantic integration, provided that they are approved by the State Defense Council; and (2) the organization of lotteries.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsOn January 23, 2003, foreign enterprises and individuals were allowed to acquire agricultural and nonagricultural land, subject to provisions in the constitution. Previously, foreign enterprises were allowed to acquire only nonagricultural land.
Controls on personal capital transactions
By residents to nonresidentsThese transactions must be registered with the BOL.
To residents from nonresidentsForeign loans received by enterprises and credit institutions must be registered with the BOL.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadThese transactions must be registered with the BOL.
Lending to nonresidents (financial or commercial credits)These transactions must be registered with the BOL.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsForeign exchange liabilities are subject to reserve requirements, which must be held in dollars and/or euros in a special account at the BOL. The choice of currency or currencies is left to the bank’s discretion.
Open foreign exchange position limitsBanks’ overall open positions may not exceed 25% of their capital, and the open position in individual currencies may not exceed 15% of banks’ capital.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadInvestment companies may invest only in “liquid” EEA and OECD securities, as defined by the Lithuanian Securities Commission. There is a limit on investment by pension funds in foreign securities, of which 20% must be in “liquid” EEA and OECD securities. Insurance companies require permission from the State Supervisory Authority to invest in non-EEA and non-OECD countries.
Currency-matching regulations on assets/liabilities compositionInsurance technical provision funds must be invested in assets expressed in the currency in which the insurance company’s commitments are due, as established in the insurance or reinsurance contracts.
Other controls imposed by securities lawsNo.
Changes During 2003
Capital transactions
Controls on real estate transactionsJanuary 23. Foreigners were allowed to acquire both agricultural and nonagricultural land.
Changes During 2004
Exchange arrangementJune 27. Lithuania adopted the ERM II of the EMS, although the authorities continued to maintain the currency board arrangement without modification.
Imports and import paymentsJanuary 1. The licensing requirement for imports of alcoholic beverages and tobacco was lifted.

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