Riga, 5 December 2008

To stimulate the interbank money market, the Bank of Latvia Council resolved today to change the overnight lending rate. The resolution will take effect on 9 December.  

The current annual 7.5% rate, which up to now was independent of the number of days, within the previous 30 day period, that the overnight facility was used, will from now on apply to banks that have used the facility no more than 5 working days within said period. Where the facility has been used no more than 10 working days within the previous 30, the rate will be raised to 15% per year and where the use has exceeded 10 working days, an annual rate of 30% will be applied.

The other interest rates set by the Bank of Latvia are currently the following:
- refinancing - 6.0% per annum;
- overnight deposit facility - 3.0% per annum.