Press Release of March 24, 2000



On March 24, 2000, the Council of the Bank of Latvia approved the Bank's annual report for 1999, including the balance sheet, profit and loss statement, statement of recognised gains and losses, and cash flow statement. It also passed a resolution on entering into long-term currency swap arrangements and approved the regulation for said transactions.

The Bank of Latvia's financial statements for 1999 were audited by an audit commission consisting of representatives from the auditing company KPMG and the State Audit Office of the Republic of Latvia. In the opinion of the commission, the financial statements present fairly, in all material respects, the financial position of the Bank of Latvia as at December 31, 1999 and the results of its operations and cash flows for the year then ended in accordance with the accounting policies adopted by the Bank of Latvia and the Law "On the Bank of Latvia".

The Council of the Bank of Latvia adopted the "Regulation for Long-Term Currency Swaps" (in effect as of April 15, 2000). The new monetary policy instrument will enhance the availability of long-term funds in lats at currency swap auctions. The interest rate set for long-term currency swaps is likely to become a reference rate for long-term transactions in lats. Likewise, the introduction of the new instrument will promote the development of other long-term financial instruments and enable banks to maintain a reasonable maturity structure of assets and liabilities. The US dollar, the euro, the British pound and the Japanese yen, which are the currencies of the SDR basket, will be the foreign currencies to be involved in long-term currency swaps. The Council of the Bank of Latvia passed a resolution "On Long-Term Currency Swaps", whereby it set the minimum interest rate on funds in lats involved in currency swaps with a maturity of 2 years at 6.5% per year.