Latvia's borrowing options are currently favorable, says Treasury manager

The Treasury currently has enough resources to meet government decisions and state liabilities, but there are no problems with borrowing additional funds if necessary, State Treasury manager Kaspars Āboliņš said in an interview to Latvian Radio November 30.

He said that the Treasury had a balance of €2.8 billion, enough money to cover past liabilities, but that €1.5 billion of previous loans should be repaid soon.

Āboliņš said it is currently beneficial to raise funds if needed and there will be no problem with borrowing opportunities.

The Treasury Manager explained that the country has the option to borrow in international markets, internal markets and also international organizations such as the Nordic Investment Bank, or European Commission. He said lending rates are currently beneficial, the 10-year rates are even negative, but there are risks if the rates get higher in the future, when the debt is to be refinanced.

He also predicted that this year the budget deficit, which has reached nearly €410 million in 10 months, will rise further, since spending in December is generally higher than in previous months, and also this year won't be an exception. Next year, budget deficits are likely, but it will be important to return to fiscal discipline after overcoming the COVID-19 crisis.

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