Litas devaluation should not be joked about, Bank of Lithuania governor warns

December 4, 2007 at 12:32 am 1 comment

Lithuanian Euro coinLithuania has no reasons to devalue the national currency, the litas, the governor of the Bank of Lithuania has said repeatedly and warned that the subject should not be joked about.

“I have said it very clearly – there is no ground, no conditions, no necessity either to devalue or revalue [the litas]. The devaluation would not solve anything; on the contrary, it would boost the inflation several times. I would say it is a too important question having an effect on all our people, and such things should not be joked about,” Reinoldijus Sarkinas said in an interview to the public TV channel Lietuvos Televizija (Lithuanian Television) on Sunday night.

Asked whether Lithuania was ready for a scenario similar to that in Estonia where people rushed to purchase all euros after the announcement about an alleged devaluation of kroon, Sarkinas said that the possibility of such a situation in Lithuania was only theoretical.

He admitted, however, that domestic banks were ready for similar provocations and had accumulated sufficient stocks of euro banknotes.

Speculations about the devaluation of national currency have recently intensified in Latvia, which has been plagued by high inflation of lately.

Although some foreign analysts warn that all three Baltic countries face such danger, the representatives of Lithuania’s authorities and finance experts claim that litas would not be devalued.

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Entry filed under: Baltic States, Economics, Estonia, Lithuania, Northern Europe.

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