Moody's: Crisis constrains Latvia

Latvia's Baa3 government bond ratings are supported by significant, extraordinary financial assistance from the International Monetary Fund and European Union, Moody's Investors Service said in a new sovereign credit report.

The ratings are constrained by the severe effects of the ongoing global credit crisis on Latvia's economy, the risk of currency devaluation and the country's uncertain prospects for recovery, Moody's said.

The outlook is negative.

Latvia's economy and government have been deeply affected by the global credit crunch and regional recession, and Moody's said it is concerned that the economy will struggle to rebound in the current environment.

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