Latvian residents and foreigners alike are allowed to open accounts in lats and foreign currencies without any restrictions. They can buy and sell lats freely or exchange them for other currencies. There are no restrictions even on capital account transactions. No Restrictions on Capital Movements Latvian legislation and the policy of the Bank of Latvia ensure free movement of capital to and from Latvia. Both foreign currency and the lats can freely enter and leave the country.
Foreign investors can repatriate their profits in any currency without restriction.
Experience shows that fixing the exchange rate to a basket of currencies instead of a single currency serves to promote long-term stability to which the Bank remains strongly committed. The fixing of the exchange rate, if it is durable and credible, reduces uncertainty, eliminates exchange risk and provides businesses with a sound basis for planning and pricing, thereby fostering investment and international trade relations. The liquidity of the banking system is mostly influenced by foreign exchange operations. The Bank of Latvia intervenes in the foreign exchange market by setting the exchange rates, and thus has a strong stabilizing impact on the markets. Financial flows and the interplay of demand and supply in financial markets are the real determinants of interest rates.