Nov. 24 (Bloomberg) -- Three-month interbank rates in Latvian lats exceeded the cost of borrowing in euros for the first time in a year and government bond yields rose to a record after regulators halted operations at Latvijas Krajbanka AS.
Asking prices for three-month Rigibor rose 23 basis points today to 1.63 percent, their highest since June 2010, compared with 1.47 percent for Euribor. Borrowing costs in lats, which have increased 62 basis points since Nov. 15, had been lower than Euribor since November 2010. The yield on Latvia’s 10-year bond increased 1 basis point to a record 6.52 percent.
Latvia’s banking regulator suspended operations at Krajbanka on Nov. 21, appointing new management and informing the General Prosecutor that 100 million lati ($191.4 million) may be missing. The lender is a unit of AB Snoras Bankas, which was taken over by Lithuania’s government on Nov. 16 after the central bank discovered 300 million euros ($401 million) of assets may be missing, raising the risk of insolvency.
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