Tuesday, November 13, 2012

Latvia holds rates steady, sees limited inflation risks

    Latvia's central bank held its key policy rate steady at 2.50 percent as inflation risks remain limited and the Bank of Latvia doesn't see any mid-term risks to price stability.
    The Bank of Latvia, which cut its refinancing rate in September and July for a total reduction of 100 basis points, said economic growth has been more sustained that expected and there has been a gradual redirection of the economy from external to domestic demand.
    "The Bank of Latvia Council is of the opinion that the current monetary policy conditions match the economic situation," the bank said in a statement following a meeting of its council.
    Latvia's economy expanded by 1.70 percent in the third quarter from the second quarter for an annual growth rate of 5.3 percent, up from 5.0 percent in the second quarter.
    The inflation rate eased further to 1.6 percent in October, the lowest rate this year.


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