Latvia psychologically ready for euro – central bank chief Rimsevics

Latvia’s Central Bank Governor Ilmars Rimsevics says the country is psychologically ready for euro adoption in January, and is confident its banks will pass ECB stress tests.

REPORTER: ‘The ECB, and we talked about the ECB because the ECB has also questioned the viability of the country. I’ve mentioned inflation rates already but it’s also talked about, this reliance, this heavy reliance on a non-resident deposit base. Clearly, comparisons arise with Cyprus in some people’s minds. How worrying should this reliance on the non-resident deposit base be?’

RIMSEVICS: ‘There has been never reliance on non-resident deposits. Non-resident deposits historically has been on a level between 40% and 50% of the total deposits. Comparison with Cyprus is absolutely out of the picture because Cyprus’ economy versus the banking sector was eight times smaller or in other words, the banking sector was eight times bigger. In Latvia, it’s only 1.3 times so, and I think we explained everything at the beginning of this year once having these succession discussions with the European Union. And I think just one letter and three meetings was enough.’