Bank of Latvia president: Euro has contributed greatly to Latvia’s well-being

Ilmars Rimsevics
Reuters/Scanpix

He said that while the Eastern and Western economies were going through a period of downturn, Latvia was still one of the fastest growing economies in the euro zone. The euro has raised Latvia’s credit ratings, allowing the country to save up to EUR 70-80 million a year in interest payments. This means extra funds in the budget that can be spent domestically, Rimsevics stressed.

Commenting on investment in Latvia, Rimsevics said that there was no reason to complain. “There have been investments, perhaps not as large as we expected, but we must take into account the global economic situation. We must take into consideration that the situation does not look very bright, which is why people choose to wait it out,” Rimsevics said.

He explained that the investment flow was hindered by two factors – the worrying situation in the region and the uncertainty regarding the future development of Latvia’s economy.

If Latvia still had its national currency during the geopolitical crisis in Ukraine, uncertainty and would have exerted a much larger pressure on the lat, said Rimsevics. “It is possible that fluctuations within the currency exchange corridor would have been rather serious. People would have started spreading rumours about Latvia’s economy being hurt, advising against investing in Latvia. There are no grounds for such rumours now, people cannot be fooled any more,” Rimsevics said.

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