Can Latvian Financial Crisis Impact Bulgaria?

I am not an economist, but this is too important: Mary Stokes from the RGE Monitor says that a Latvian crisis would shake confidence in Bulgaria’s currency board.

The background: Latvia is currently in a deep financial crisis, and Mrs. Stokes says a devaluation of the lat is imminent. This may add pressure on the Bulgarian currency board, because Bulgaria shares a similar boom-bust trajectory to that being played out in the Baltics.

An important aspect of the problems with Latvia is the timing for entry in the ERM II mechanism.

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