Publishing date: 12.11.2014.

The principal changes in the assets and liabilities of Latvijas Banka on the 31 October 2014 balance sheet as compared to 30 September 2014 and the reasons for these changes.

In October 2014 loans granted in longer-term (up to three months) refinancing operations by Latvijas Banka shrank by 6 million euro, while the amount of loans granted as a result of targeted longer-term refinancing operations remained unchanged at 25.0 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 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 Latvijas Banka's balance sheet item "Claims related to other operational requirements within the Eurosystem". As at 31 October 2014 the balance sheet item "Banknotes in circulation" comprised the euro banknotes actually issued in circulation in the amount of 629.4 million euro, as well as the lats banknotes in circulation which had not been exchanged for euro yet (79.7 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 40.6 million euro and 64.9 million euro respectively are reported under the balance sheet item "Other liabilities".

In October deposits with credit institutions shrank by 212.8 million euro or 25.4% 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, 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.

 
J. Caune
Chief Accountant
Latvijas Banka