‘No comment’ from Sweden over aid to Latvia

Sweden confirmed on Monday that it has entered into a dialogue with Latvia but would not comment on whether it planned to offer financial aid to the struggling Baltic nation.

“We are having a dialogue with the Baltic states on a political level and between staff at ministries and authorities to keep us updated on developments,” said Markus Sjöqvist, a spokesman for the finance ministry.

The International Monetary Fund said on Sunday it was working on a sizable aid package for Latvia, which would include preserving the current exchange rate peg.

Latvia has sought rescue funds as a financial crisis has led to worries it might need to devalue its currency, the lat. Swedish banks could face large loan losses in the event of a devaluation.

“In cooperation with the European Commission, some individual European governments, and regional and other multilateral institutions, we are working with the authorities on the design of a programme that maintains Latvia’s current exchange rate parity and band,” the IMF mission chief to Latvia, Christoph Rosenberg, said in a statement.

A Latvian Finance Ministry adviser said last week Sweden was considering joining efforts to help the Baltic state.