As an Englishman living in Riga, let me speak as an outsider who lived in England when we also had an overheated economy. When we had inflation, we were lucky enough to have people in government who were not afraid to make hard choices. Firstly they took sterling out of the E.R.M. and let the pound float. Secondly interest rates went up even to 16 percent at one time. Yes it was hard, but we came out of it a much stronger country.
The difference is we had people in government who put the country first and themselves second, which can't be said for Latvia. I am willing to bet that all in the know have put plans into effect to protect themselves against the future of the lat. I myself keep my funds in sterling as I am sure the way things are going Latvia will have a hard landing. It's the man in the street who will suffer, not the people in power who could solve the problem if they really wished.
I do not say it will be an easy ride, but better now before matters get worse and far harder.