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UPDATE 1-Latvia govt working on private placements

Published 09/10/2009, 06:37 AM
Updated 09/10/2009, 06:39 AM

(Adds quotes, background)

RIGA, Sept 10 (Reuters) - Latvia is working on tapping financial markets via private placings to supplement the loans from the IMF and EU on which it is dependent, Prime Minister Valdis Dombrovskis said on Thursday.

Latvia last year agreed a 7.5 billion euro rescue led by the International Monetary Fund (IMF) and European Union (EU). It has already received funding worth more than 2 billion euros. The treasury has also been raising debt on the local market.

"We will make some private placements," Dombrovskis told a news conference. "Certainly the treasury is working on this."

He said such issues were foreseen in a new letter of intent signed with the IMF, but that he would rather leave it to the experts to discuss about timing and volumes and other details.

The letter of intent says that Latvia's 2009 budget deficit, forecast to be 10 percent of gross domestic product, or about 1.2 billion Latvian lats, will require significant domestic financing, though it did not name a sum.

During a parliament debate on Wednesday, Finance Minister Einars Repse interrupted a parliamentarian who had said the sum of 400 million lats was how much Latvia wanted to borrow.

Repse said such information was secret as it could help market participants.

Dombrovskis also told the news conference that he did not want to reveal details in order to avoid giving an unfair advantage to the market.

(Editing by Ron Askew)

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