Fitch: Latvia needs support

Fitch Ratings said it said in a new report that Latvia could need a €5 billion financing package from the IMF, E.U. and other international lenders to stabilize its economy and forestall growing risks of a severe economic and financial crisis.

"Latvia needs a substantial international support package to stabilize its economy. If Fitch judges that the support package is not of sufficient size, design and credibility to forestall a severe economic and financial crisis then it would further downgrade Latvia's ratings," said Eral Yilmaz, associate director in Fitch's sovereign group.

Fitch said it downgraded Latvia's foreign currency issuer default rating to BBB- from BBB and placed Latvia's issuer default ratings on rating watch negative on Nov. 11 following the failure of the country's second-largest bank, Parex banka, last month.

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