Latvian lats standard from its introduction till 1940. On 17 June 1940, Latvia was occupied by the USSR. After the dismantling of the Bank of Latvia and its replacement with the Latvia Republican Office of the Gosbank on 10 October, the Soviet ruble was introduced alongside the lats on 25 November 1940 at par, although the real monetary value of the rouble was about three times lower and thus both wages and prices were gradually raised to devalue the lats from June to November 1940. To lessen the effect of the exodus of goods sent by Soviet occupational personnel to the USSR,
Baltic states housing bubble to housing bubble in the Baltic states. Another direct outcome from the "cheap" credit abroad guided the banks to engage in imprudent lending supported by its parent banks. As the interest rate has been free-falling in the Baltic states, the real interest rate on deposit has been dwindling. Throughout the housing bubble period in the Baltic states, the deposit to loans ratio continued to widened – far higher than the entire Euro Area. For that reason, banks in the Baltic states have to borrow abroad heavily denominated in Euros before passing the currency risk to potential customers. As such move