Monetary policy

The monetary policy of Latvijas Banka and the Eurosystem aims to achieve price stability so that inflation stands at 2% over the medium term, and this aim is symmetric.

In the euro area, monetary policy decisions are taken by the Governing Council of the European Central Bank comprising all Governors of the central banks. The decisions are binding on all Member States.

Monetary policy is implemented by the Eurosystem, also including Latvijas Banka, by applying the monetary policy instruments which are regularly adjusted to the current situation in the economy and financial market.

GDP and inflation projections in Latvia and the euro area constitute an integral part of monetary policy.

Monetary policy decisions are taken based on a detailed economic analysis in the euro area, including Latvia, and the world at large. The analysis of economic indicators also enables Latvijas Banka to play a role of a government adviser.