EUR  32% 4%  SDR basket of curren cies  12%  USD  39%  GBP  Foreign trade turnover 1st quarter 2004  36% 47%  JPY  Other  57%  Results of the euro poll: by and large, enterprises support the BoL strategy Answers to the question: Which, from the perspective of your company, would be the desirable peg of the lats?
60 50 40 30 20 10 0  BIS Review 65/2004  Euro  SDR  Dollar  Any  5  Euro introduction timetable 2005  2004  2007  2006  2008  Latvian convergence report published  Latvia accedes Lats pegged to to the EU the euro, Latvia joins ERM II  Latvia joins EMU, introduces the euro  Lats' peg to the SDR basket means less exchange rate fluctuation 0.85 0.70 0.90  LVL/USD  1.00 0.60 1.05 1.10  0.55  EUR/USD  0.95  0.65  1.15 0.50 1.20 0.45  1.25 I  II  III  1999  IV  I  II  III  IV  2000  I  II  III  2001  LVL/USD  6  IV  I  II  III  2002  IV  I  II  III  2003  IV  I  II  III  2004  EUR/USD  BIS Review 65/2004  Lats exchange rate against SDR set by the BoL and quoted on the interbank market Lats/SDR 0.8100  0.8100  0.8080  0.8080  0.8060  0.8060  0.8040  0.8040  0.8020  0.8020  0.8000  0.8000  0.7980  0.7980  0.7960  0.7960  0.7940  0.7940  0.7920  0.7920  0.7900 Jan.2003  0.7900 Mai.2003  Sep.2003  Jan.2004  KB bid  KB ask  LB bid  LB ask  Mai.2004  Lats exchange rate against the euro set by the BoL and quoted on the interbank market 0,69 0,68 0,67 0,66 0,65 0,64 0,63 0,62 0,61 0,60 Jan.2003  Mai.2003 LB ask  BIS Review 65/2004  Sep.2003 LB bid  Jan.2004 KB ask  KB bid  Mai.2004  Sep.2004  LVL/EUR spot  7  Currency market volatility – is not greater on the last day of the year  Exchange rate of the euro against the lats: would pegging to the average instead of the market rate be more favourable?