Latvia’s President Edgars Rinkēvičs invites the Bank of Latvia to look for solutions to help improve the country’s lending environment, as LETA was informed by the president’s advisor Mārtiņš Drēģeris.
During the meeting with the governor of the Bank of Latvia Mārtiņš Kazāks, the two sides discussed existing macroeconomic developments and the lending policy employed by Latvian commercial banks, including the high mortgage loan interest rates and their negative effect on financial stability of households.
Officials also discussed challenges associated with business lending environment in Latvia.
The country’s president invites the central bank to look for solutions for both problems. First of all, delays with reduction of support for households to help reduce the negative consequences from the rapid growth of interest rates. Secondly, it is important to look for ways to prepare the lending environment to make it capable of fully supporting economic growth after a period of high inflation.
Rinkēvičs also said there is currently no competition between Latvian commercial banks, which is reflected in high lending costs and low deposit rates as opposed to, for example, the State Treasury’s offer for savings bonds, as well as the fact that private persons do not have the opportunity to receive interest on the funds in the current account.
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