3. pants

Monetary conditions during the

first nine months of 2001 were sufficiently tight to support the

Bank of Latvia's (BoL) exchange rate objective, and all monetary

performance criteria to date under the program were observed. In

addition, the BoL reduced the volume of new issues of both

long-term and short-term foreign exchange swaps as envisaged

under the program. Despite the continued strong growth of credit

to the private sector, the banking system appears to operate on a

firm footing.