Published: 12.05.2015

The principal changes in the assets and liabilities of Latvijas Banka on the 30 April 2015 balance sheet as compared to 31 March 2015 and the reasons for these changes.

In April 2015, loans granted as a result of targeted longer-term refinancing operations by Latvijas Banka increased by 10.0 million euro or 6.2%.

Following the decision of the Governing Council of the European Central Bank (ECB) of 22 January 2015 on an expanded asset purchase programme (APP), Latvijas Banka started purchases of securities issued by the Latvian government and international organisations located in the euro area in March 2015. The balance sheet item "Securities held for monetary policy purposes" grew by 164.5 million euro or 86.5% in April, mostly on account of the above purchases of securities.

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 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 30 April 2015, the balance sheet item "Banknotes in circulation" comprised the euro banknotes actually issued in circulation in the amount of 621.8 million euro.

In April 2015, deposits of credit institutions grew by 622.6 million euro or 32.8% as reflected in the balance sheet item "Liabilities to euro area credit institutions related to monetary policy operations denominated in euro".

Mainly as a result of cross-border payments received and made by credit institutions and Latvijas Banka, a decrease was recorded in liabilities to the ECB reported under the balance sheet item "Liabilities related to TARGET2 and national central bank correspondent accounts (net)", mostly reflecting settlement result in the TARGET2 settlement system.

A decline in the balance sheet item "Capital and reserves" was mostly on account of the share of profit of Latvijas Banka for 2014 in the amount of 23.9 million euro, appropriated to the state budget.

J. Caune
Chief Accountant
Latvijas Banka