Publishing date: 12.09.2014
The principal changes in the assets and liabilities of Latvijas Banka on the 31 August 2014 balance sheet as compared to 31 July 2014 and the reasons for these changes.
In August 2014 loans granted in longer-term refinancing operations as a result of monetary operations by Latvijas Banka remained unchanged standing at 6 million euro.
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 its share of the European Central Bank's (ECB) 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 Latvijas Banka's balance sheet item "Claims related to other operational requirements within the Eurosystem". As at 31 August 2014, the balance sheet item "Banknotes in circulation" comprised the euro banknotes actually issued in circulation in the amount of 659.8 million euro, as well as the lats banknotes in circulation which had not been exchanged for euro yet (81.6 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 40.1 million euro and 65.0 million euro respectively are reported under the balance sheet item "Other liabilities".
In August deposits with credit institutions shrank by 44 million euro or 6%, as reflected in the balance sheet item "Liabilities to euro area credit institutions related to monetary policy operations denominated in euro".
As a result of cross-border payments of credit institutions and the Latvian government, a slight 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.