Weak euro benefits Lithuania, President Grybauskaitė says

“In any case, (eurozone) entry now and the fluctuation of the euro exchange rate is probably more beneficial for Lithuania at the moment, because our competitiveness in third countries increases, as do export possibilities for our producers,” she said at her annual news conference when asked if Lithuania joined the eurozone at the right time, given the single currency’s troubles.

The president said that the euro will make it possible for Lithuania to borrow more cheaply and will help attract new investment.

The euro-to-dollar exchange rate fell to 1.1843 on Wednesday morning as investors waited for the latest euro zone inflation data.

Nerijus Mačiulis, a Swedbank economist, has said that Lithuania’s eurozone entry will allow the country to borrow at lower interest rates and will eliminate currency exchange costs for businesses. He estimates that Lithuania will save around 115 million euros after all state loans are refinanced in five to six years’ time.

Gitanas Nausėda, advisor to the president of SEB Bankas, has told BNS that Lithuania will feel tangible benefits of the new currency within three to five years. In addition to lower borrowing costs, the euro should lead to an increase in foreign investors’ activity in Lithuania and make the country’s image stronger, he said.