International Monetary Fund
The International Monetary Fund (IMF) is an international organization that was conceived in July 1944 in Bretton Woods to foster international monetary cooperation and exchange rate stability, to promote economic growth and employment as well as to provide temporary financial assistance to members to help them address balance of payments problems. Currently the IMF membership is 187 countries.
Latvia and the IMF
Latvia joined the IMF on May 19, 1992. The legal basis for the cooperation between Latvia and the IMF is governed by the law of April 15, 1992 on the Republic of Latvia's accession to the International Monetary Fund. In the Board of Governors, the highest decision-making body of the IMF, Governor of the Bank of Latvia is Governor of the IMF for the Republic of Latvia, and State Secretary of the Ministry of Finance is Alternate Governor. Therefore, the Bank of Latvia is the leading institution that represents the interests of the Republic of Latvia in the IMF and ensures daily cooperation.
Each IMF member country has been granted a quota whose amount broadly reflects the share of each member's economy in global economy. Latvia's quota in the IMF is 126.8 million SDR representing 0.06% of total IMF quota.
The Executive Board (the Board) is responsible for conducting the day-to-day business of the IMF. Latvia represents its interests and takes part in the IMF decision-making in the Nordic-Baltic Constituency (NBC). The NBC is comprised of the following countries: Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, Norway and Sweden. The NBC's share of total IMF votes is 3.39%1. The NBC develops a common position about the IMF issues that are discussed by the International Monetary and Financial Committee (IMFC) and by the Board. Country representation in these bodies is determined by an agreed rotation schedule. From 2011 until beginning of 2013 the Executive Director of the NBC is Benny Andersen, Denmark. Consequently, National Bank of Denmark (Danmarks Nationalbank) is responsible for coordinating the views on IMF issues among the central banks and the ministries of finance of the NBC.
The Executive Director heads the Nordic-Baltic Office (NBO) in Washington where all NBC countries are permanently represented according to the above-mentioned rotation schedule. The NBO staff, including Latvia's representative, ensures support to the activity of the Executive Director, analyzes information about the issues on the Board agenda, and prepares opinions in line with the common approach agreed in the NBC and reports about topical IMF issues. Latvia's representative in the NBO is also the coordinator for Latvia's cooperation with the IMF.
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Latvia cooperates with the IMF on a regular basis in the framework of the IMF surveillance known as Article IV consultations. The IMF staff visits the country according to the IMF stated consultation cycles to assess the country's macroeconomic situation and financial sector developments and to discuss economic policy with the Latvian authorities. After the visit the IMF experts compile a report and present it to the Board for discussion and completion of the consultation.
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In 2008, the Latvian government and the IMF reached an agreement on a 1.7 billion euro Stand-by Arrangement (SBA) to Latvia. In the framework of the program agreed under the SBA, the Latvian government cooperates regularly with the IMF focusing on macroeconomic areas like fiscal, structural and financial sector policies. On the basis of the IMF experts' assessment, the Board reviews the program on a regular basis.
Detailed information about economic stabilization program is available here.
In 2009, a Resident Representative Office in Latvia was opened.
1 Following the coming into effect of the 2008 Amendment on Voice and Participation to the Fund's Articles of Agreement on March 3, 2011, voting shares will change as eligible members pay their quota increases. During this process, this information will be updated regularly.
