Lito patikimumo įstatymas ir valiutų valdybos samprata

Abstract

The main objective of adopting a currency board arrangement by the Central Bank of Lithuania was to increase the credibility of the domestic currency, the litas, and to keep inflation under control. The government has to finance any deficit by borrowing from the private sector or commercial banks, but cannot borrow from the Bank of Lithuania. Therefore, the government issues debt to the private sector. Similar currency board arrangements helped establish currency credibility and stability in Estonia. Deposit and loan interest rates in Lithuania for different currencies are important signals of the outlook for the economy and the credibility of the currency. After four years under the currency board arrangements, confidence in the litas had increased substantially, as shown by lower interest rates and a smaller gap between rates for litas and foreign convertible currencies in Lithuania.