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’On the matter of renewing confidence in the Latvian economy
One thing the financial crisis has taught the Western world is that when it comes to defending your reputation, the CEE states are masters of their game.
Who can forget their unity over evil currency speculators?
Or,
Latvia preparing for devaluation?
On Tuesday, we reported that Latvia’s government was taking legislative steps to change the sums lenders could collect on outstanding mortgages to better reflect the current market value of the properties.
Defcon Latvia, again
Economic troubles have been bubbling away in Latvia for months, but the country’s government has so far stood strong in the face of rising pressure to devalue the currency to help mitigate some of the negative economic effects.
Moody’s stands by Latvia, for now
Moody’s said on Thursday it was ready to stand by its investment-grade rating of Latvia, but only while international financial bodies continued to provide extraordinary financial support to the country.
Latvia’s not for turning
The governor of the Bank of Latvia, Ilmars Rimsevics, took a heroic stand on CNBC Wednesday morning, rubbishing all talk of potential devaluation and accusing anyone of having suggested as much of being hugely misguided on the subject of Latvia,
Latvia jitters creeping back
Latvia is back in the headlines as talks between the government and the IMF over its second loan instalment continue to flounder over differing budgetary views.
The analyst community is now interpreting the deadlock as yet another possible chink in the armour of Latvia’s euro-peg defence.
Trouble in Latvia, again
Uh oh. This can’t be good.
From Reuters (our emphasis):
RIGA, July 15 (Reuters) – The International Monetary Fund has put forward new, difficult conditions for Latvia to receive further loans, the prime minister said on Wednesday in a further sign the Fund is being tougher than the European Commission.
When all else fails: beg, steal and borrow
And in Latvia’s case, from your own central bank if necessary. As Reuters reports on Monday (our emphasis):
FRANKFURT, June 29 (Reuters) – The European Central Bank has urged Latvia to rethink plans to siphon off half of its central bank’s profits to help rebuild the country’s battered finances.
Latvia’s Achilles heel: deposits
A very interesting analysis on the Latvia situation is brought to us by Eduardo Levy-Yeyati, Director and Head of Emerging Markets Strategy at Barclays Capital on Monday via the VoxEu.org platform.
The author argues the country’s best bet for economic salvation will be through contained devaluation,
Latvia: More parallels with Argentina
As Ambrose Evans Pritchard recently wrote in the Telegraph, there are some real parallels emerging between the financial crises of Latvia and Argentina. On the subject of Argentina, he reminded readers (our emphasis):
Crisis averted; Latvian central bank buys euros
Ambrose Evans Pritchard of the Telegraph may have written off Latvia on Monday with a scathing comparison to Argentina, but the country’s central bank is not taking the criticism lying down. In fact, as Reuters reports:
Rigibor: ‘The new’ Libor
Latvia’s lat currency is up on Monday following reports the government staged a major defence of the country’s euro peg last week.
Nevertheless, the country’s interbank rate – known as the Rigibor – continues to soar on nearly a daily basis.
Make no mistake, the ‘Baltic Three’ are in the dock
While Latvia’s central bank stands firm in the face of adversity singing a united chorus of “we shall not devalue, we shall not devalue,” all indications still remain that they will.
First proof of the inevitable comes in the form of the Latvian interbank overnight rate,
Urgent message from the central bank of Latvia: ‘Do not disrespect us!’
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,
Waiting for Latvia to devalue
The Swedish central bank shored up its currency reserves by SEK100 bn last week. The move was widely interpreted as national preparation for a potential Latvian devaluation — Swedish banks having up to $75bn worth of exposure to Latvia,