. the structure of latvian gdp is in line with that of the developed countries : the shares of agriculture and manufacturing in total value added declined from 10 % in 1995 to 4 % in 2001 and from 22 % to 13 %, respectively, while the share of services increased from 56 % to 63 %. latvia's export structure by trade partner indicates expansion in the share of exports to the eu : 61. 2 % of total exports in 2001 went to the eu member states. although accession countries are not required to meet the maastricht convergence criteria, we have set fulfilling the maastricht convergence criteria as a medium - term target in the area of nominal convergence. already now latvia complies or is close to complying with most of them. – in october, consumer price inflation was 1. 6 %. – gross government debt was only 15. 0 % of gdp at the end of 2001. – there was no budget deficit in 1997 and 1998. in 2000 and 2001, the budget deficit was below the maastricht ceiling, i. e., 3 % of gdp. – yields on government bonds, while still higher ( 5. 54 % for 5 - year treasury bonds in july 2002 ) than the maastricht criteria, are on a downward trend and their maturity continues to increase. we expect to be able to meet the requirements in the medium term. – the lats has been pegged to the sdr basket of currencies at a constant exchange rate since 1994. latvia has thereby shown that it is ready and able to meet the currency stability criterion. during the pre - accession period, the exchange rate peg of the lats to the sdr will be maintained. this peg has served the bank well and has ensured narrower exchange rate fluctuations than a possible peg to any single currency. in addition, the composition of latvia's foreign trade by settlement currencies closely resembles the composition of the sdr basket, with the us dollar and the euro being the major component in both. the bank of latvia will be prepared to join the european system of central banks at the time of latvia's accession to the eu. the structure and objectives of the bank of latvia, the degree of its independence and its set of monetary policy instruments are fully in line with those defined for the european system of central banks.

, 0 % 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 nominal value ( sek bn, left scale ) value in relation to gdp ( per cent, right scale ) note : banks ’ holdings are excluded. sources : statistics sweden and sveriges riksbank. although there are many drivers explaining the move from cash to electronic payments, i would like to highlight two actions by the riksbank. one is a decision to “ not do ” and the other is decision to “ do ”. the first is the “ not do ”. we decided in the early 1990s not to implicitly subsidize cash anymore by storing it all over the country and allowing for overnight deposits. it took some time to implement this strategy. but as of a few years back, the riksbank only has one cash depot in the entire country. it is the market ’ s responsibility to store and transport cash, hence those costs are now borne by the market. the second is a “ do ”. a few years back, we engaged in a dialogue with a consortium of banks and the swedish clearing house on how a fast payment system available 24 / 7 could be created. for a payment system to be safe, you want to assure an eventual settlement over the central bank ’ s 2 books that is in central bank money. this can normally only be done when the central bank ’ s payment system is open. after some thinking, we found a way to connect the instant payment system with the riksbank ’ s system and by allowing ring - fenced overnight balances for this purpose - or to put it differently by extending a secured credit overnight - we managed to construct a scheme where the fast payments are backed by central bank money even when our system is closed. the result? today over half of the swedish population have downloaded the fast payments app ( swish ) on their smart phone and it has become a prominent feature in the retail payment landscape, providing a substitute for cash in person to person ( p2p ) payments. cards and cash are the most common payment methods among consumers source : sveriges riksbank. these two examples shows that a central bank may need to be both “ hands off ” and “ hands on ” depending on the situation to foster innovation. the trick is to find the right degree of intervention at the right time. and to perform that trick there are no short cuts. a thorough analysis of costs and benefits is needed. 3 another lesson is