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Investor Relations

Debt and cash management strategy

Created : 02.08.2017. Updated: 17.05.2024.

The Law on Budget and Financial Management stipulates that the Minister of Finance on behalf of the state can make borrowings in the amount specified in the annual budget law for purposes of financing the state budget deficit, refinancing the state debt and for the purposes which are specified in the state budget law.

The Minister of Finance within the cash management can invest temporarily available funds that are located in the Treasury's of the Republic of Latvia accounts in fixed income securities or deposits, as well as in other assets, terminate such investments to ensure the execution of the state budget and use derivatives.

The Treasury of the Republic of Latvia according to the authorization from the Minister of Finance is managing the state borrowing and cash management activities, ensuring the management of public debt, liquidity and cash according to Minister’s of Finance approved the Central Government Debt and Cash Management Strategy.

The total medium-term financing requirement is affected by the amount of borrowing needs and the level of government debt, and it is constituted by the amount of financing required for the execution of the state budget and refinancing the state debt.

Planned borrowing operations for covering the financing requirement and the choice of most suitable financial instruments is set within the medium-term Funding plan, which is elaborated by the Treasury and approved by the Minister of Finance. The annual Law on the State Budget and Medium Term Budget Framework prescribes the maximum permissible amount of debt outstanding at the end of the year.

The planning aspects for medium-term borrowing take on-board the strategic context in relation to the choice of markets and borrowing conditions. Such an approach allows to maintain flexibility towards borrowing time, currency, amount and maturity, as well as positively impacts diversification and further expansion of investor base.

As a largest share of debt consists of Eurobonds, the financing should be secured well in advance thus reducing government debt refinancing risk. In the medium term, the Treasury plans to cover financing needs mostly by issuances of benchmark size Eurobonds in the main global capital markets. Simultaneously, in order to diversify investor base in the government debt portfolio, and provided that financial terms are adequate, the Treasury reviews the possibility to raise the funds partly also in niche capital markets.

Due to strategic aspects for maintaining a regular supply, the Treasury organises regular auctions in domestic market. Supply volume and offered instruments are adjusted to the actual situation in the financial markets and domestic market capacity. Starting from 2020, the Treasury in regular domestic auctions re-opens outstanding Eurobonds (initially issued in international markets) via Primary dealers. Such an approach ensures increase of liquidity of outstanding Eurobonds.

The main objective of the Primary dealer system from its beginning in 2013 has been the development of domestic securities market, including the introduction of new borrowing instruments, expansion of investor base, ensuring the supply of liquid government securities in the market, as well as reducing risks associated with the servicing of the government debt.

In order to ensure alternative investment opportunities in low risk financial instruments, the residents of Latvia (private individuals), since 2013 are offered an opportunity to invest in government issued savings bonds with different maturities, of which the longest is 10 years. The public offer of savings bonds is available 24/7 online in special web page The availability of savings bonds enhances residents’ investment experience and confidence in the financial market, as well as, in general, contribute to the development of domestic financial market.


Central Government Debt Redemption (nominal value), mio euro


Weighted-average cost of debt: 1.79 % (on December 30, 2023)

Weighted-average maturity: 6.74 years (on December 30, 2023)

Central Government financing estimation 2023 - 2026