Bloomberg News

Latvia Leaves Benchmark Interest Rate Unchanged at 2.5 Percent

January 24, 2013

Latvia’s central bank, which pegs its currency to the euro, left its benchmark interest rate unchanged for a second meeting.

Latvijas Banka kept the refinancing rate at 2.5 percent, Governor Ilmars Rimsevics told a news conference today in the capital, Riga.

The Baltic nation is rebounding from the world’s deepest recession in 2008-2009, when economic output shrank by almost a quarter after a property bubble burst and credit inflows dried up, prompting an International Monetary Fund bailout. The economy grew about 5 percent in 2012, Finance Minister Andris Vilks said last month.

The refinancing rate affects the minimum interest rate on about 75 million lati ($143 million) a week of central bank swaps and repurchase agreements. The bank runs a quasi-currency- board system, pegged to the euro, where lati in circulation are backed by foreign currency.

To contact the reporter on this story: Aaron Eglitis in Riga at aeglitis@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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