The Latvian central bank on Thursday decided to leave the benchmark refinancing rate unchanged at 3.5% for a third consecutive rate-setting session as economic growth stabilized.

The overnight deposit facility rate was maintained at 0.375% and the seven-day deposit facility rate was left unaltered at 0.5%. The bank also retained the marginal lending rates during the meeting.

In a brief statement, the central bank said the decision to maintain the rates was made in view of further stabilization of the economic situation, recent reduction in money market interest rates and the high liquidity available to banks as a result of the uncertainty regarding the state budget 2011.

Official data had showed that consumer prices in Latvia declined for an eleventh successive month in August, with the consumer price index falling 0.3% year-on-year. In the second quarter, the economy expanded at a faster pace as the gross domestic product increased a seasonally adjusted 0.8% sequentially compared to 0.3%. growth in the first quarter.

Latvia should embark on long-term structural reforms to achieve sustainable economic growth, World Bank chief Robert Zoellick said in August. During the visit, he agreed to disburse 400 million euros in financial assistance from the 7.5 billion euro loan package requisitioned by Latvia.