The Bank of Latvia ended last year with multimillion-dollar losses

Due to the increase in interest rates by the European Central Bank, the Bank of Latvia’s deposit expenses have increased significantly. Interest expenses on deposits of Latvian credit institutions reached 174 million euros, and on government deposits – 45 million euros.

“Taking into account the increase in interest expenses, the Bank of Latvia ended 2023 with losses in the amount of EUR 54 million, which, according to the Bank of Latvia Law, were covered from the reserve capital provided for such cases. The losses do not reduce the ability of the central bank to conduct an effective monetary policy and do not entail costs for state,” the central bank emphasized.

Last year, the Bank of Latvia transferred 58 million euros to the state budget, including 45 million euros as interest on government deposits and 13 million euros in taxes.

The Bank of Latvia notes that similar financial results are expected for many other central banks, since they are mainly related to the implementation of the main task of central banks – the formation and implementation of monetary policy in conditions where decisive actions are necessary to slow down sharp price increases.

The Bank of Latvia also notes that the main task of central banks is to implement monetary policy, and not to make a profit.

“For the Bank of Latvia, 2023 was a fruitful and productive year,” said Martins Kazaks, president of the central bank.