Latvia moved a step closer to becoming a full participant in Europe’s Economic Monetary Union (EMU) Tuesday as  the European Central Bank approved a fixed exchange rate from lats to euros.

The EU’s Economic and Financial Affairs Council's decision set the exchange rate at 0.702804 lats to 1 euro. That's the same rate already set by the Bank of Latvia in 2005 as the currency's peg to the euro. The rate was approved as the irrevocably fixed exchange rate for the euro changeover. 

While Latvia enjoyed the benefits of accession to the European Union since 2004, it has stopped short of fully integrating with the EU’s monetary system.

For a while the participation by the EMU was postponed until Latvia could comply with certain criteria prepared by the European Commission.

Since 2005 the lat peg to the euro  has proved “both its suitability for the economy as well as sustainability,” the Latvian Central Bank said. The stability of this system as well as structural reforms have attributed to the recovery of the Latvian economy from the recent economic crisis, the statement from the bank added.

“We hope that the irrevocable fixing of the lat's conversion rate at this level will increase the support to the euro changeover in Latvia in the coming months (currently close to 40%),” the statement concluded.