As posted on the website of the Latvian Central bank (in Latvian):
A quick Google Translate translation provides the following:
The discussion about the exchange rate
Last week, several Latvian politicians, economists have publicly expressed their views on the devaluation issue, sowing doubt and mistrust, or openly calling for devaluing the national currency. This again contributed to the current stir, rumors, residents, business and financial market nervousness. Latvia’s population and economy, it means undeniable loss: People with lats go to the currency exchange offices, banks; lata spare time and amount of lats in circulation decreases, the lat interest rates increasing, increases the borrower’s credit, in general, further reduce the activity of the Latvian economy.
Responsibility for the devaluation of the central bank - the Bank of Latvia’s hands, which is an independent body. The Bank of Latvia has chosen a certain policy, it reasoned explanation for the public and implemented. Discussed the negative impact of devaluation on the citizens, businesses, government solvency of the Bank of Latvia has been clarified and made clear that the stability will be maintained until the lats will replace the euro*, the conclusion of the current macro-economic stabilization program.
Equally clear is the mechanism for operating a fixed exchange rate, which allows the Bank of Latvia to implement this policy. Thus, the conscious or unconscious doubt about sowing the only effect is a state and citizens of financial deterioration and thus, the notes alone society, it welcomed as a disrespect to their country.
They go on:
It is understood the need for discussion, but not without a Cloud of water quality to society (???). Economists, politicians and entrepreneurs have a productive discussion during a crisis is needed on how to invest public resources targeted to our traders, exporters would be able to earn, to be able to create goods and services with high added value after the world’s economy will begin to recover. Need for discussion and decisions on national priorities - education system - public support - the business relationship, which coincides with the reforms carried out in several fields, in order to continue to use public funds effectively. The Bank of Latvia’s president, board, experts are ready to meet and forward to meet with various companies and business organizations - to clarify his position, listen to arguments and to offer solutions to economic development.
The issue of devaluation affects every resident of Latvia maciņu and accounts, each operator, borrowers, latu deposit holders, the national budget. Therefore, the Bank of Latvia invites officials and other people with influence on public opinion to be responsible words and deeds.
So there you have it. You people of influence on public opinion be warned. The Bank of Latvia is not impressed with your slandering devaluation talk — there will be no devaluation, the lat peg stands!
The question is, who believes them?
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*Reader beware: As commenters have pointed out below, the Google Translate text throws up the notion the Latvians may be planning to takeover the euro with the lat. While that’s certainly an innovative solution to the country’s problem, it’s most likely the outcome of a Google Translate grammar misunderstanding. What the Latvians actually mean to say is undoubtedly until “euros replace the lat”.
As we at FT Alphaville do not speak Latvian, however, the text remains unamended until someone with a good grasp of the language confirms the real meaning.
Related links:
Latvian bond failure begins - FT Alphaville
A Baltic quagmire, continued - FT Alphaville
Waiting for Latvia to devalue - FT Alphaville
Is Eastern Europe on the edge again? - FT Alphaville
