OREANDA-NEWS. May 20, 2013. The Bank of Latvia Council resolved to leave the interest rates and minimum reserve requirement set by the Bank of Latvia unchanged.

Sustained low inflation rates persist in Latvia and the economic growth rate posts no risks to price stability in the medium term. The Council of the Bank of Latvia considers the current monetary policy stance appropriate for the economic situation. In the last few months, however, the risk of the economic growth in 2013 moderating in comparison with the previous forecasts has increased. Such possibility should be taken into account when planning the economic policy for the near future.

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

In view of timely preparation for the potential introduction of the euro, the Bank of Latvia Council approved the following six revised regulations of the Bank of Latvia governing the compilation of statistical reports:

- "Regulation for Compiling the Monthly Financial Position Report of Monetary Financial Institutions";

- "Regulation for Compiling the 'Report on Adjustments in Respect of Write-Offs/Write-Downs of Loans and Price Revaluations of Securities' ";

- "Regulation for Compiling Interest Rate Reports of Monetary Financial Institutions";

- "Regulation for Compiling the 'Report on Money Market Transactions' ";

- "Regulation for Compiling Reports on Foreign Currency Purchases and Sales";

- "Regulation for Compiling 'Credit Institution and Electronic Money Institution Payment Statistics Report' ".

To reduce the reporting burden of respondents, only such amendments which will have no substantial effect on the respondent information systems have been made in the statistical reporting forms in comparison with the current regulations.

The above regulations will take effect simultaneously with amendments to Article 39 of the Law on the Bank of Latvia, i.e., on the day as of which the Council of the European Union abrogates the Republic of Latvia's derogation under Article 140(2) of the Treaty on the Functioning of the European Union (upon Latvia's changeover to the EU single currency).

On the above date Bank of Latvia Regulation No.45 "Regulation for Compiling the 'Report on Net Open Foreign Exchange Position' " of 5 November 2009 will also become invalid.

To ensure timely preparation of the Bank of Latvia payment systems for the changeover from the lats to the euro, if the Council of the European Union abrogates the Republic of Latvia's derogation under Article 140(2) of the Treaty on the Functioning of the European Union, the Bank of Latvia approved amendments to "Regulation for the Participation Procedure in the Bank of Latvia's Electronic Clearing System" and "Regulation for the Participation Procedure in the Bank of Latvia's Interbank Automated Payment System", introducing an additional business day on 30 December 2013 for the lats payment systems: in this way the number of lats payments and payment card transactions initiated and unsettled at the end of the year will be reduced and the lats settlement of financial transactions performed at the end of the year will be completed.

On the day as of which the Council of the European Union abrogates the Republic of Latvia's derogation under Article 140(2) of the Treaty on the Functioning of the European Union, "Regulation for the Participation Procedure in the Bank of Latvia's Interbank Automated Payment System" will become invalid and the operation of the systemically important interbank automated payment system (the SAMS) will be terminated. TARGET2-Latvija, a component system of TARGET2 in Latvia, will provide interbank large-value real-time settlements in euro for the financial market participants.

TARGET2 is one of the largest payment systems in the world. In TARGET2 real-time settlements in euro are performed by more than 1000 financial institutions from the European countries, including its Latvian participants. More than 50 800 financial institutions can be reached in the system. In view of the close links of the Latvian economy and financial system with the euro area, as well as the role of the euro in Latvia and the operation of its financial system and businesses, Latvia joined TARGET2 already in 2007. Since 2008 the Bank of Latvia has also ensured the operation of the Bank of Latvia's electronic clearing system (EKS), the interbank retail payment system in euro. The EKS is the only operating payment system in Latvia ensuring clearing (net settlement) for bulk retail credit transfers in lats and euro. The EKS for euro settlements operates as per TARGET2 business day calendar. Consequently, the Bank of Latvia payment systems which are vital both for the operation of Latvia's financial system and business and individual settlements are ready for the euro changeover, planned for 1 January 2014.