The Supervisory Board of Eesti Pank Approved the 2005 Annual Report of Eesti Pank

At its regular meeting on Tuesday, 25 April, the Supervisory Board of Eesti Pank approved the 2005 Annual Report and was apprised of the implementation of the budget for 2005.

In 2005 the profit of Eesti Pank totalled 237.4 million kroons, of which the Supervisory Board decided to channel 178 million kroons into the special reserve fund of Eesti Pank and 59.3 million kroons (25% of the profit) to the state budget. Eesti Pank's financial forecast for 2005 expected the profit to amount to 204.9 million kroons, whereas the actual profit exceeded the expectations by 15.8%.

The Supervisory Board decided to continue Eesti Pank's profit-sharing strategy, pursuant to which the central bank transfers up to 25% of its revenue to the state budget. The Supervisory Board considered the existing profit-sharing strategy and took into account forecasts of Eesti Pank's excess reserve above the currency board cover to the GDP and to the monetary aggregate M2.

The profit-sharing strategy undergoes an annual assessment by the Supervisory Board in order to ensure the profit-sharing principles are in line with Eesti Pank's performance of its core functions pursuant to law. From the point of view of monetary policy, it is important to maintain an adequate level of the excess reserves above the currency board cover, at least until the adoption of the euro in Estonia. The current profit sharing strategy has been used practically unamended since 1999.