“Significant and rising risk” of currency devaluation in Latvia – Fitch

Ed Parker, head of emerging European Sovereigns at Fitch, has told a conference today that there is a significant and rising risk that Latvia may have to devalue it’s lat currency.

Mr Parker said “We do see a significant and rising risk of devaluation and that is why we’ve downgraded Latvia’s sovereign rating.”

Fitch cut Latvia’s rating to BB-plus from BBB-minus back in April.

The comments come at a time when there are growing hopes Latvia will get the next tranche of it’s IMF loan, having increased budget cuts to control spending, and as a result avoid a devaluation of the lat.