Latvia Leaves Benchmark Interest Rate Unchanged at 2.5 Percent

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.

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