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Created on 27.11.2014

Today the Council of Latvijas Banka approved an amendment to the "Procedure for Participation in the Eurosystem Monetary Policy Operations Organised by Latvijas Banka" (to take effect on 15 December 2014).

The amendment modifies an appendix to the above legislative act in accordance with Guideline ECB/2014/46 of the European Central Bank of 19 November 2014 amending Guideline ECB/2014/31 on additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral, revising the haircut schedule applicable to marketable debt instruments issued or fully guaranteed by the Greek government.

Latvijas Banka applies haircut in the Eurosystem credit operations where eligible assets are used as collateral. When calculating the value of the pledged security, Latvijas Banka reduces the market value of the respective security by a certain percentage (valuation haircut). The valuation haircut applied to a security depends on its residual maturity, liquidity and coupon payment structure.

The valuation haircuts applicable to marketable debt instruments issued or fully guaranteed by the Greek government have been defined in Appendix 1.8 to the "Procedure for Participation in the Eurosystem Monetary Policy Operations Organised by Latvijas Banka".