The principal changes in the Bank of Latvia's assets and liabilities on the 31 March 2007 balance sheet as compared to 28 February 2007 and the reasons for these changes.
• A decrease of 52.7 million lats or 2.0% in foreign assets as the Bank of Latvia's interventions, selling euro to banks, exceeded the amount of foreign currency obtained in currency swaps and the increase in the balance of the Government funds in the Bank of Latvia's foreign assets. A drop in the gold price also had a dampening effect while the change in the lats equivalent of financial derivatives had an increasing effect on foreign assets.
• A fall of 0.8 million lats or 0.6% in foreign liabilities resulting from a decrease in other foreign liabilities due to securities market value fluctuations, and an increase in the European Commission funds in lats with the Bank of Latvia.
• A 39.6 million lats or 2.1 times rise in domestic assets, following a 39.2 million lats increase in loans granted to credit institutions.
• A drop of 14.6 million lats or 1.0% in domestic liabilities as a result of a 3.3 million lats and 12.1 million lats decrease in the respective balances of the credit institutions funds and the Government funds with the Bank of Latvia, and a 1.3 million lats increase in other domestic liabilities.
• On the liabilities side of the balance sheet, the amount of lats in circulation was decreased by 1.0 million lats or 0.1% mainly on account of the above changes.
• An increase of 3.3 million lats in the capital and reserves as the retained earnings of the reporting year grew, and the revaluation account balance changed due to exchange rate fluctuations.
Vilnis Purvins
Head of the Macroeconomic Analysis Division
Monetary Policy Department
Bank of Latvia