IMF: effective bank supervision strengthened Lithuania’s financial sector, the country is ready to adopt the euro

The IMF observed that Lithuania’s sustainable economic policy drove the growth of a balanced economy, decreased inflation and strengthened public finances, creating good opportunities for Lithuania to adopt the euro from 2015. According to IMF estimates, the country is prepared for membership in the euro area, and the adoption of the euro would be the natural next step, which would increasingly strengthen the country’s financial stability, decrease the debt risk premium and encourage foreign trade and foreign direct investment.

The IMF stresses that effective banking supervision strengthened the stability of the financial system. The Bank of Lithuania’s steps to immediately address bank and credit union issues was also positively assessed. The IMF also welcomes plans to strengthen the powers of the Bank of Lithuania in implementing macro-prudential policy in Lithuania.

Lithuania has been a member of the IMF since 1992, and 188 countries belong to this international monetary institution. The cooperation of Lithuania and the IMF is based on the consultations in Article IV of the IMF Articles of Agreement. This Article of the Agreement obligates Member States to implement national and global financial and economic stability, ensuring economic and financial policy. The IMF carries out regular monitoring of the Member States and provides recommendations for achieving and maintaining the aforementioned stability.

IMF representatives visit Lithuania every year to assess its economic situation and the economic development trends. This time the IMF mission was working in Lithuania from 20 February to 3 March. The IMF’s documents are posted on the IMF website.

Euro adoption