The principal changes in the Bank of Latvia's assets and liabilities on the 31 August 2009 balance sheet as compared to 31 July 2009 and the reasons for these changes.
  • An increase of 283.7 million lats or 9.8% in foreign assets mostly on account of an expansion of funds deposited by the Latvian government as a result of the second instalment of the International Monetary Fund (IMF) loan in the amount of 133.8 million lats received for financing the state budget deficit and ensuring stability of the financial sector, as well as the purchase of foreign currencies in interventions in the amount of 48.7 million lats. The increase in foreign assets was also affected by an additional allocation of Special Drawing Rights (SDRs) received from the IMF in the amount of 72.3 million lats. On 7 August 2009, the Board of Governors of the IMF approved a general allocation of SDRs to all Fund's members (including Latvia) to provide liquidity to the global economic system by supplementing Fund’s member countries’ foreign exchange reserves;
  • A decrease of 0.8 million lats or 7.0% in foreign liabilities mostly on account of a change in the lats equivalent of financial instruments while a rise in the amount of funds deposited by the European Commission had an increasing effect.
  • A decrease of 18.2 million lats or 6.2% in domestic assets, following a 20.0 million lats fall in loans granted to credit institutions.
  • A rise of 270.0 million lats or 12.8% in domestic liabilities as a result of a 250.2 million and 20.7 million lats increases and a 3.9 million lats fall in the government funds with the Bank of Latvia and in the respective balances of the credit institutions' funds and other financial institutions' funds with the Bank of Latvia.
  • On the liabilities side of the balance sheet, the amount of lats in circulation decreased by 10.4 million lats or 1.4% mainly due to the above changes.
  • An increase of 6.8 million lats in the capital and reserves mostly on account of the net interest income received in August and the result of the revaluation of securities and financial instruments.

Vilnis Purvins
Deputy Head of Macroeconomic Analysis Division,
Monetary Policy Department,
Bank of Latvia