SOME LOCAL BANKERS are sanguine about recent upsets in Latvia. “It was no more than a dash of cold water,” says Gene Zolotarev, global head of capital markets and investment banking at Parex Banka, when asked about the effect of a round of speculation about a possible devaluation of the lat. “Only certain sectors have been hit, like mortgage lending, for example, and that was fine for us since we’ve thought for a while that it was overheating.”
External observers of the boom in the Baltic republics are less confident: ratings agencies Standard & Poor’s and Fitch Ratings have both warned that Latvia in particular faces a downgrade of its credit rating.
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