Publishing date: 12.06.2014
The principal changes in assets and liabilities of Latvijas Banka on the 31 May 2014 balance sheet as compared to the 30 April 2014 balance sheet and the reasons for these changes.
The amount of loans granted by Latvijas Banka decreased by 4 million euro owing to the repayment of loans in the longer-term refinancing operations. At the end of May 2014 Latvijas Banka had granted no loans as a result of monetary policy operations.
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. Consequently, 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 banknotes issued by the Eurosystem is larger than the amount of euro banknotes issued in Latvia. As a result of the above adjustment, the 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 661.2 million euro, as well as the lats banknotes in circulation which have not been exchanged for euro yet (105.6 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 35.3 million euro and 66.3 million euro respectively are reported under the balance sheet item "Other liabilities".
Mainly on account of cross-border payments made by the Latvian government, 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)", reflecting settlement result in the TARGET2 settlement system as deposits of the Latvian government with the central bank decreased accordingly.
J. Caune
Chief Accountant
Latvijas Banka