NYU Professor Roubini: Bulgaria May Weaken Currency Control over Crisis

Business | February 5, 2009, Thursday // 00:00

The New York University Professor, Nouriel Roubini, has stated that the Baltic countries and Bulgaria might weaken their currency controls as the global financial crisis hits Eastern Europe, the Baltic Business News reported citing an interview Roubini gave for Bloomberg in Moscow.

"If fundamentals are out of line you cannot maintain a fixed exchange rate, you're going to eventually have a currency crisis. The Baltics are under pressure and Bulgaria's currency board is under pressure", Roubini is quoted as saying.

The article reminds that Bulgaria's lev is pegged at 1.95583 per euro. The country drained 16 percent of its reserves to $16.8 billion in the second half of last year, according to International Monetary Fund data.

According to Roubini, Bulgaria together with the Baltic states is at risk of a currency crisis because of its current-account deficit, which could in turn lead to banking, corporate, and housing crises.

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Full Text of the Baltic Business News Article on Roubini's Predictions READ HERE

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Tags: Global Financial Crisis

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