Current Account Re-Ignites Devaluation Debate

August 2007
Emerging Europe Monitor: Central Europe & Baltic States;Aug2007, Vol. 14 Issue 8, p11
Country Report
Country Report
The article reports on the account deficit of Latvia in the first quarter of 2007. According to the author, the account deficit stayed above 25 percent of its gross domestic product (GDP). This increases concerns regarding the competitiveness of the economy and the viability of the pegged exchange rate. The risk of a currency crisis is mitigated by many factors such as the limited exposure of the economy to international financial markets and the value of foreign banks in funding the deficit.


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