Publishing date: 11.04.2014
The principal changes in the assets and liabilities of Latvijas Banka on the 31 March 2014 balance sheet as compared to 28 February 2014 and the reasons for these changes.
In March 2014, the amount of loans granted by Latvijas Banka decreased by 1 million euro as a result of the repayment of loans in the main refinancing operations.
The repayment of the European Commission loan by the Latvian government in the amount of 1 billion euro reduced the balance sheet item "Liabilities to general government". The above transaction was behind an increase in the balance sheet item "Claims related to other operational requirements within the Eurosystem" and the corresponding rise in the balance sheet item "Other liabilities" as settlement for the repayment of the above loan was completed at the beginning of April. At the same time, an increase in the government deposits in euro had an increasing effect in the balance sheet item "Liabilities to general government".
As a result of cross-border payments of credit institution and government deposits, an increase was recorded in claims on the ECB reported under the balance sheet item "Claims related to TARGET2 and national central bank correspondent accounts (net)", mostly reflecting settlement result in the TARGET2 settlement system.
In view of the fact that euro cash is issued in circulation by all NCBs of the Eurosystem, each NCB reports banknotes in circulation on its balance sheet in proportion to the share of the ECB's capital in the total amount of euro banknotes issued by the Eurosystem rather than the actual amount issued. As a result, the amount of banknotes actually issued is adjusted in the balance sheet (increased in the case of Latvijas Banka) as the proportionate share of Latvijas Banka in the total amount of euro banknotes issued by the Eurosystem is larger than the amount of banknotes issued in Latvia. As a result of the above adjustment, respective claims on the ECB for the allocation of banknotes are reported under the balance sheet item "Claims related to other operational requirements within the Eurosystem" of Latvijas Banka. As at 31 March 2014, the balance sheet item "Banknotes in circulation" comprised the euro banknotes actually issued in circulation in the amount of 638.4 million euro, as well as the lats banknotes in circulation which had not been exchanged for euro yet (131.1 million lats). In line with the balance sheet structure, the euro coins issued by Latvijas Banka and the non-exchanged lats coins in the amount of 32.6 million euro and 67.0 million euro respectively are reported under the balance sheet item "Other liabilities".
J. Caune
Chief Accountant
Latvijas Banka