BGN Entrepreneur

Latvia’s central bank just rejected calls to be devaluaed and pledged to defend the lat’s peg to the euro despite fears in financial markets that the crisis-hit country might soon be forced to abandon the fixed exchange rate.
The lat was close to the floor of its trading range against the euro yesterday, and investors were betting on devaluation with interest rates on the currency of 70 per cent for three-month forward contract, compared with 20 per cent last week.
The Lithuanian litas and the Estonian kroon, which are, like the lat, pegged to the euro, also remained under pressure. However, fears of the turmoil spreading across eastern Europe declined, with the Polish zloty and Hungarian forint recovering some ground.
In Sweden, whose banks are heavily exposed to Latvia, the krona also recovered.

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