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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (5609)	8/17/1998 12:51:00 AM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 9980

Zeev, >Jurgis, can you tell us if the economic situation in > Lithuania is influenced by the events occurring in Russia? >Is there a possibility of a "domino" effect or is Lithuania >pretty well insulated from its former "God Father"? I don't follow the latest economic news from Lithuania, so it's difficult for me to tell. I think that the Russian crisis won't have large influence on Lithuania, unless it becomes a violent political crisis. Lithuania survived a heavy economic blockade after its secession, so I would not think lots of companies are heavily dependent on Russia. Regarding Lithuanian economy, the currency rate is pegged to US$, but I have no clue about its strength and whether currency speculators could break the peg. As far as I know there is no stock market in Lithuania. The largest hit would be Russian energy (oil) supply disruption. But this may not happen unless there is political unrest, or unless Lithuanian currency gets decimated. Again, from my gut feeling, the economies of Eastern Europe won't suffer much from Russian collapse. Russia was such an unpredictable partner in last years, that I would be surprised if any enterprises had strong expectations about trade with Russia. It was always "it may hold, but it may fold" relations. The previous hyperinflation in Russia has ensured trade based on barter and US$. Russia is always a desirable partner in trade because of its size, but the Eastern European companies had enough exposure to the unreliability of any contracts to be "street smart". Longer term, the Russian collapse is negative, though everyone would worry about political risks first. Good luck Jurgis