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Bank of Latvia

The Bank of Latvia » For All » About the Bank of Latvia » International Cooperation » Implementation of Latvia's Economic Stabilisation and Growth Revival Programme

Implementation of Latvia's Economic Stabilisation and Growth Revival Programme: International Cooperation

In the context of a severe economic downturn in Latvia and dried up liquidity in global financial markets, which made borrowing almost impossible, it was, to a large extent, the need to support the systemically important JSC Parex banka that underpinned the government's resolution to resort to international financial aid. As no funding from revenue had been appropriated for the budgetary reserve during the years of unprecedented growth, Latvia lacked resources for budget stabilisation and sought financing from the European Commission (EC), the International Monetary Fund (IMF), other international organisations and countries in the region. In December, an agreement was reached on a loan in the amount of 7.5 billion euro (including 3.1 billion euro from the EC and 1.7 billion euro from the IMF) and on the policy of economic restructuring and maintaining the current fixed exchange rate peg.

Latvia's Economic Stabilisation and Growth Revival Programme, approved by the Saeima in 2008, the Letter of Intent to the IMF as well as the Memorandum of Understanding concluded with the EC serve as a basis for granting the funding. An effective and timely implementation of Latvia's Economic Stabilisation and Growth Revival Programme is the most essential precondition for receiving the funds of the international loan. The programme provides for measures in four areas: the monetary, fiscal and financial policies, as well as the promotion of the economic competitiveness.

Letter of Intent to the Managing Director of the International Monetary Fund by Prime Minister and Minister of Finance of the Republic of Latvia, Governor of the Bank of Latvia and Chairwoman of the Financial and Capital Market Commission

Letter of Intent (pdf 430 KB)
Vēstule Starptautiskajam Valūtas fondam (pdf 443 KB)

Memorandum of Understanding between the European Community and the Republic of Latvia 

Memorandum of understanding (pdf 136 KB)
Saprašanās memorands (pdf 196 KB)