Danske: Roots of Latvia’s devaluation panic are rather in Stockholm
05.06.2009, 12:23 Investors’ attitude to Latvia and current
fear of devaluation doesn’t come from the state’s bad news, but rather from
Swedish capital Stockholm, Lars Christensen, senior analyst at Danske Markets
writes in weekly review, E24.ee reports.
Christensen considers Swedish central bank Riksbanken’s decision to increase
currency reserve by SEK 100 bln to be the most important news. Investors took it
as it was a buffer to help Swedish banks solve potential problems from Baltic
countries.
Bengt Dennis, former governor of Riksbanken and current Latvia government
advisor, poured oil to the fire by confirming that lat’s devaluation is a matter
of time. Since Dennis is influential man in Latvia and Sweden, his words
mattered to investors.
“Considering news from Riga and Stockholm it’s not surprising that people are
wary of lat’s devaluation more than ever before and the situation is getting
more insecure,” Christensen said.
He expressed hope that whatever decisions Latvian government makes in
following weeks, they are beneficial for the state’s economy in longer
perspective.