Tuesday, March 10, 2009

Latvian Central Bank Supports Lati once again

To support the national currency, the Latvian Central Bank had to purchase 51.2 million Lati (€74 million). The currency just weakened to its trading limit for the second time in 2 weeks and the Central Bank had to make a move. Indeed, the Lati is not allowed to appreciate or weaken more than 1% compared to the euro.
Last week, the bank had already spent 28.4 millions lati and the amount during the 11 previous weeks reached more than 1 billion euros.

The IMF recently lent €7.5 billion to Latvia to support the economy. The money is apparently well used...There were rumors of devaluation but the governement always denied and is now showing that Latvia does not want to give up the euro "race", even if it has a huge cost.

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