In view of the fact that the current inflation risk factors are not related to a rise in demand and that risks for price stability in the medium term are limited, the Bank of Latvia Council today resolved to leave unchanged the interest rates set by the Bank of Latvia and the mandatory reserve requirement in place for the banking sector.

Even though inflation has been on the rise in recent months, it has been, as before, on account of several temporary factors: the rises in global oil and food prices and Latvian tax rates. It can be predicted that in the medium term inflation will moderate, and the annual average inflation will return to the 2.5-3% level.

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

The Bank of Latvia Council approved amendments to the Bank of Latvia "Credit Register Regulation", to improve the creditors', i.e. Credit Register participants', ability to evaluate the creditworthiness of existing and potential borrowers and to expand the financial markets and possibilities of macroeconomic analysis for the Financial and Capital Market Commission and the Bank of Latvia.

Among the most important amendments to the "Credit Register Regulation" are the inclusion of new information about the status of the borrower's liabilities, their origins and execution, which will provide an opportunity to determine, with greater precision, the current status of borrower's liabilities and the manner in which they originated and are being executed, and the exclusion of previously compiled information on violation of Paragraph 73 of the Credit Institutions Law and other significant contractual violations in order to prevent subjectivity in Credit Register participants' evaluations of the said violations. Compilation of information on delayed payments is still retained.

Some of the amendments will take effect on 25 July 2011 while the rest, i.e. those that require changes in the Credit Register membership information systems, will come into force on 1 February 2012. The amendments provide for a transitional period until 30 June 2012 during which participants will review and update information in the Register.

In order to continue to provide an efficient exchange of information between the Bank of Latvia and members of the Credit Register in accordance with the amendments to the "Credit Register Regulations", relevant amendments were also made to the Bank of Latvia's "Regulation for an Electronic Exchange of Information with the Bank of Latvia".

The Credit Register is an information system of the Bank of Latvia ensuring the collection, centralised accumulation and storage of data on borrowers and borrower guarantors, their obligations and performance thereof, aimed at providing information to the Credit Register participants, the Financial and Capital Market Commission, the Bank of Latvia and borrowers themselves (natural and legal persons) in compliance with the procedure stipulated by laws and regulations.