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Objectives of the Bank of Latvia

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Objectives of the Bank of Latvia


The Bank of Latvia is the central bank of the Republic of Latvia. It is one of the key public institutions and carries out economic functions as prescribed by law.

The principal objective of the Bank of Latvia shall be to maintain price stability in Latvia.

The Bank of Latvia's functions are set out in the Republic of Latvia Law "On the Bank of Latvia". Among the most important objectives of the national central bank are the following:

- to establish and implement monetary policy in order to ensure price stability in the country;
- to issue the national currency;
- to promote the smooth operation of the payment systems in Latvia;
- to issue permits (licences) to legal persons listed in the Register of Enterprises of the Republic of Latvia, except credit institutions, for the purchase and sale of cash foreign currency as a business activity;
- to collect, record and aggregate the financial information and the data of the national payment balance, as well as to publish the processed statistical information;
- to manage foreign assets;
- to act as financial agent for the government.
- to issue permits (licences) to legal persons listed in the Republic of Latvia Register of Enterprises, except credit institutions, for the purchase and sale of foreign currency as a business activity.

The Bank of Latvia represents the Republic of Latvia in foreign central banks and international financial institutions. The Bank of Latvia also consults the Parliament and the Cabinet of Ministers on monetary policy issues and other issues pertaining to the execution of its tasks.

In execution its functions the Bank of Latvia is guided by the Law "On the Bank of Latvia" and is not subject to decisions and instructions by the Government or other institutions. The Bank of Latvia is independent in setting and implementing policy under its legal mandate.

Supervision of the Bank of Latvia is vested with the Parliament.

The Law "On the Bank of Latvia" proscribes the national central bank from conducting any commercial activity. The Bank of Latvia finances its activities from revenue received through foreign exchange and credit operations that are carried out within the framework of its objectives.

The Law "On the Bank of Latvia" prescribes the authorised nominal capital of the Bank of Latvia at 25 million lats.

The Law "On the Bank of Latvia" establishes that part of the Bank of Latvia's annual profit, calculated by applying the tax rate set for residents by the Law "On Enterprise Income Tax", and a payment in the amount of 50 per cent of the profit earned during the reporting year for the usage of State capital shall be transferred to the State budget.
The Bank of Latvia's profit remaining after making the above deductions shall be transferred to the reserve capital. The reserve capital shall be formed to cover possible losses.

The Audit Commission of members authorised by the State Audit Office of the Republic of Latvia performs the inspection and audit of documents and the economic activity of the Bank of Latvia.
Source:
http://www.bank.lv/en/about-the-bank-of-latvia/objectives-of-the-bank-of-latvia?pop=1&tmpl=component

Almost all important Latvian financial institutions are located in Riga, including the Bank of Latvia, which is Latvia’s central bank. Foreign commercial trade through Riga has been on the increase in recent years and received new stimulus in 2004 when Latvia became a member of the European Union.

 
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