Riga, 1 November 2007


At its 1 November 2007 plenary session, the Saeima of the Republic of Latvia has confirmed the present head of the central bank, Ilmārs Rimšēvičs, in his office as Governor of the Bank of Latvia for another six-year-period to begin on 21 December.

Ilmārs Rimšēvičs: "I truly appreciate the continued confidence in me expressed by the Saeima, which will provide the Bank of Latvia with the opportunity to continue its monetary policy directed at stability of the lats while lending support to the state’s resolve to prepare for a transition to the euro, which may take place as early as 2012 or 2013.

Now that Latvia is a member of NATO and the EU, the euro has to become Latvia’s strategic goal, as important from the point of view of state security and economic stability as the previous ones. I am fully aware that such an approach to the euro is something that has yet to be developed within Latvian society; that will be a task for the Bank of Latvia not only in terms of economic policy but in terms of communications. To a great extent, transition to the euro will be a prize to Latvian economy for a successful reduction of inflation and economic imbalances that has already begun.

As we enter late autumn, we are beginning to see the first results of the government coordinated anti-inflation measures aimed at returning the recent, excessively rapid growth of GDP to sustainable levels and reducing the increase in import growth over export as well as the pressure of consumption on prices. Among the most important gains is the gradual reduction in lending rates: it is extremely important to avoid any excesses in this area, stabilizing crediting at a level that is necessary for steady economic growth sustainable over the long term.

The efforts directed at the stabilization of the Latvian economy must be consistently continued, analyzing the effectiveness of the measures taken and considering the possibility of supplementing them. The state budget for 2008, with its surplus in the amount of 1% of GDP, which is being promoted by the Government, is an important step toward stabilizing the economy. It would be augmented by subsequent surplus budgets. Setting economic priorities, as has been promised for a long time, would also be a stepi n the right direction. The Bank of Latvia is ready to participate in developing a strategic development plan for the Latvian economy, mobilizing its best resources for analysis and research."

The Bank of Latvia is an independent state and financial institution whose main tasks are to implement monetary policy, manage the national currency reserves, ensure the functioning of the payment system and circulation of currency, prepare financial statistics and state balance of payments, and to act as the financial agent for the Government. The Bank of Latvia conducts macroeconomic analysis and research necessary for the implementation of monetary policy and for advising the Government on a balanced development of the economy.