Publishing date: 12.05.2014
The principal changes in the Bank of Latvia's assets and liabilities on the 30 April 2014 balance sheet as compared to 31 March 2010 and the reasons for these changes.
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.
A decrease in the balance sheet item "Claims related to other operational requirements within the Eurosystem" of Latvijas Banka, with a corresponding fall in the balance sheet item "Other liabilities" in the amount of one billion euro, mostly resulted from the settlement finalization of the repayment of the European Commission loan by the Latvian government in March.
In view of the fact that euro cash is issued in circulation by all national central banks (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 30 April 2014 the balance sheet item "Banknotes in circulation" comprised the euro banknotes actually issued in circulation in the amount of 685.0 million euro, as well as the lats banknotes in circulation which have not been exchanged for euro yet (115.6 million euro). In line with the balance sheet structure, the euro coins issued by Latvijas Banka and the non-exchanged lats coins in the amount of 33.7 million euro and 66.6 million euro respectively are reported under the balance sheet item "Other liabilities".
An increase in the balance sheet item "Liabilities to general government" was mostly a result of the funds received for the Latvian government bond issue in the amount of one billion euro, while the redemption of Latvian government bonds in the amount of 400 million euro at the beginning of the month had a decreasing effect.
A decrease in the balance sheet item "Capital and reserves" of Latvijas Banka was mostly on account of the share of profit of Latvijas Banka for 2013 in the amount of 38.3 million euro, appropriated to the state budget.
J. Caune
Chief Accountant
Latvijas Banka