The failed auction also had analysts and investors fearing that the lat will have to be devalued, something Prime Minister Valdis Dombrovskis does not support.
Despite his statement that devaluation will not be discussed, Dombrovksis did say that should the situation come to the worst, the lat would be devalued 30 percent.
"If we conventionally cut everything 10 pct, which is not planned, it would be unimaginable decrease for budget. At the same time, if we're talking of devaluation, it definitely won't be less than 15 pct. It'd most likely be 30 pct. That means that people's real income shrinks very fast much more than the government does by cutting expenditures," Dombrovskis told Diena.
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