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Created on 14.03.2011


Taking into account the gradual economic recovery and the fact that the current inflation risk factors are not related to a rise in demand and price stability risks are limited in the medium term, the Bank of Latvia Council today resolved to leave unchanged both the interest rates set by the Bank and the mandatory reserve requirement set for the banking sector.  
The latest economic indicators confirm a continuing economic recovery, but a slowing trend is gradually beginning to become apparent.
The rise in inflation at the beginning of the year was caused by supply side factors: the rising global oil and food prices as well as administrative decisions, i.e. to raise taxes.  The demand side still acts as an inflation limiting factor: the developments in wages and consumption are quite moderate, a high unemployment level is maintained and bank lending is still contracting. The risks to price stability are thus not significant in the medium term and, once the prices of energy resources and food stop rising in the foreign markets, a drop in inflation and its stabilizing at a lower level can be predicted – with the proviso that no further tax hikes are on the agenda.  

The Report of the Governor of the Bank of Latvia, Ilmārs Rimšēvičs, at today’s press conference will be available in the news section of the Bank of Latvia’s home page www.bank.lv 

The interest rates set by the Bank of Latvia are as follows:

  In effect as of % per annum
Bank of Latvia refinancing rate 24.03.2010. 3.5
Bank of Latvia marginal lending facility rate to banks that have used the facility no more than 5 working days within the previous 30 day period 09.12.2008. 7.5
Bank of Latvia marginal lending facility rate to banks that have used the facility no more than 10 working days within the previous 30 day period 09.12.2008. 15.0
Bank of Latvia marginal lending facility rate to banks that have used the facility more than 10 working days within the previous 30 day period 09.12.2008. 30.0
Bank of Latvia overnight deposit facility rate   24.11.2010. 0.25
Bank of Latvia 7-day deposit facility rate 24.11.2010. 0.375