Latvia's government bond hit by banking turmoil

By Kitco News / February 19, 2018 / www.kitco.com / Article Link

LONDON, Feb 19 (Reuters) - Latvia's benchmark bond fell on Monday, after one of the country's biggest banks was accused of breaching Western sanctions on North Korea and its central bank governor was detained by the country's anti-corruption agency.

The moves saw the main Oct 2026 euro-dominated bond drop 0.67 cents to 96, its lowest since August. The yield, which moves inverse to the bond's price, climbed to 0.85 percent.

ABLV Bank, Latvia third biggest lender, was ordered by theEuropean Central Bank -- its supervisor -- to stop all payments on Monday as its "liquidity position" had deteriorated sharply since the U.S. Treasury accused it last week of money laundering. In a separate development, Latvia's government increased pressure on central bank boss Ilmars Rimsevics, an ECB policymaker, to quit after he was detained by police over the weekend in an anti-corruption probe.

The Latvian Anti-Corruption Authority said on Monday Rimsevics' detention was related to a solicitation for a bribe. (Reporting by Marc Jones, Editing by Abhinav Ramnarayan)

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