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On the Resolutions of the Bank of Latvia Council
Riga, 11 March 2010
The Bank of Latvia Council resolved today to reduce the Bank of Latvia refinancing rate from 4.0% to 3.5%, taking into account the stabilizing of the economic situation and limited inflation risk.
The Bank of Latvia Council likewise resolved to introduce a new monetary instrument - a seven-day deposit facility with the Bank of Latvia and set its interest rate at 1.0%, to promote predictability of banking sector liquidity.
The Bank of Latvia Council also resolved to reduce the overnight deposit facility with the Bank of Latvia interest rate from 1.0% to 0.5% to motivate the banks to direct their available resources toward economic development.
All the above resolutions will take effect on 24 March 2010.
The Report of the Governor of the Bank of Latvia, Ilmârs Rimđçvičs, at today’s press conference will be available in the news section of the Bank of Latvia’s home page www.bank.lv .
The interest rates set by the Bank of Latvia are as follows:
| In effect as of | % per annum | |
| Bank of Latvia refinancing rate | 24.03.2010. | 3.5 |
| Bank of Latvia marginal lending facility rate to banks that have used the facility no more than 5 working days within the previous 30 day period | 09.12.2008. | 7.5 |
| Bank of Latvia marginal lending facility rate to banks that have used the facility no more than 10 working days within the previous 30 day period | 09.12.2008. | 15.0 |
| Bank of Latvia marginal lending facility rate to banks that have used the facility more than 10 working days within the previous 30 day period | 09.12.2008. | 30.0 |
| Bank of Latvia overnight deposit facility rate | 24.03.2010. | 0.5 |
| Bank of Latvia 7-day deposit facility rate | 24.03.2010. | 1.0 |
The Bank of Latvia Council adopted amendments
to the "System Rules for Participation in TARGET2-Latvija"
(to take effect on 01.07.2010.), making editorial changes to Appendix
1.7 "Providing Intraday Credit". From now on, the Bank of Latvia will
only accept euro-denominated securities as collateral for
TARGET2-Latvija intraday credit.
The euro payment system TARGET2 is a real time payment system used by the national central banks of the Member States of the European Union, participants in the Economic and Monetary Union, together with the European Central Bank to implement the single monetary policy and promote smooth operation of the euro payment system. EU banks use this system for financial market settlements as well as large value and urgent customer payments. TARGET2-Latvija started its operation on 19 November 2007, and the Latvian commercial banks, the Bank of Latvia and the Treasury have joined it as the direct participants. TARGET2-Latvija provides its participants with an efficient, fast and reliable infrastructure for payments in euro, using the deposits with the Bank of Latvia for settlement.
The above Regulations will be available to all interested parties in the Legal section of the Bank of Latvia's website www.bank.lv.
