RIGA, June 3 (Reuters) - Latvian Prime Minister Valdis Dombrovskis on Wednesday again ruled out a devaluation, but said his nation could aim to adopt the euro in 2013 at the earliest, though the central bank has said it should aim for 2012.
Latvia last year agreed a 7.5 billion euro IMF-led rescue and is slashing spending to meet the terms of the loan.
"A devaluation of 30 percent...would mean that the value of people's savings and real incomes would very quickly fall much further than the budget cuts we are carrying out," he told public radio in an interview.
As the economy now faces a drop of 18 percent this year, some analysts have suggested that a devaluation of the lat currency, which is pegged to the euro, would be less painful.
Latvian interbank rates spiked this week and the lat has stayed at the weak end of its pegged band against the euro due to devaluation fears as the economy is set for a deep slide.
Swedish bank shares and the Swedish crown have also fallen due to worries about Swedish bank exposure to Baltic markets.
In an interview with Diena newspaper, Dombrovskis said that under the IMF programme the government did not commit to adopt the euro in 2012, but to meet the Maastricht criteria in 2011 by having a budget deficit under 3 percent of GDP.
"This rhetoric about introducing the euro in 2012 can be heard very often. It is not really clear to me on what it is based," he said.
"The earliest is 2013 (to adopt the euro)," he added, though he noted that a deficit of 3 percent GDP was a medium-term goal and that this could also be met in 2012.
The central bank, on the other hand, has said the goal is to adopt the euro in 2012 and that the government should cut spending and achieve the budget deficit necessary for that goal.
Dombrovskis also told Diena that talks with the International Monetary Fund and the European Union, which led the rescue package, on meeting the terms of the bailout would continue.
He said that the government no longer wanted to have to aim for a deficit measured as a percentage of GDP as the GDP forecast kept being reduced. Instead, he wanted to aim for an amount of reductions the government had to make. (Reporting by Patrick Lannin; Editing by Kim Coghill)