The financial management system of Latvijas Banka has been developed to support decision-making processes, financial risk management, and the efficient use of financial resources. The major financial transactions of Latvijas Banka are centred around the management of financial assets and the implementation of monetary policy.
Chart 1. Balance sheet of Latvijas Banka (assets/liabilities (–); millions of euro)
The assets of Latvijas Banka saw a decline of EUR 898 million in 2025. The main changes in assets and liabilities were as follows:
- the balance sheet item "Securities held for monetary policy purposes" decreased by EUR 1451 million due to the redemption of securities purchased by Latvijas Banka under the public sector purchase programme and the pandemic emergency purchase programme;
- the volume of credit institutions' deposits fell by EUR 1360 million, mainly owing to the decrease in overnight deposits at a pre-set interest rate;
- due to cross-border payments, liabilities to the ECB for the settlement result in TARGET rose by EUR 848 million.
Latvijas Banka concluded 2025 with total recognised gains of EUR 332 million (EUR 214 million in 2024), leading to an increase in Latvijas Banka's capital and reserves by 35% (to EUR 1275 million).
As a result of the management of Latvijas Banka's financial investments and gold, total value increased by EUR 496 million during the year, achieving an annual yield of 8% and significantly exceeding the EUR 399 million gain recorded in 2024.
Chart 2. Overall financial result of Latvijas Banka (millions of euro)
Since June 2024, euro interest rates have been significantly reduced, so Latvijas Banka's net monetary policy operation expenses decreased to EUR 72 million (EUR 158 million in 2024), including interest expenses on deposits from Latvian credit institutions amounting to EUR 139 million (EUR 238 million in 2024) and interest expenses on deposits from the Latvian government reaching EUR 21 million (EUR 41 million in 2024).
Of the EUR 496 million increase in the market value of financial investments and gold achieved in 2025, EUR 192 million is recognised in the profit and loss statement, while EUR 304 million is recorded as a revaluation reserve within total capital and reserves, in accordance with Eurosystem accounting principles, and does not pass through the profit and loss statement. Consequently, a profit of EUR 27.6 million was recorded in the profit and loss statement, of which EUR 19.3 million are to be transferred by Latvijas Banka to the state basic budget.