Swedish bank head warns Latvia on obligations - paper

Sweden's central bank chief has joined a chorus of top Swedish officials in warning Latvia that it needed to stand by agreements with international lenders, according to an interview in a Swedish daily on Thursday.

Riksbank Governor Stefan Ingves told Dagens Nyheter Latviahad accepted demands by lenders and that it could not simply come back and ask for more lenient terms.

"It is as though we are living in a completely different world" Ingves was quoted as saying, in response to the idea that Latvia could change the terms of its accords.

"The IMF will conduct a review in November, when they will go through everything that is happening in Latvia. This question belongs in any such discussion" Ingves said.

His comments follow similar warnings by Swedish Prime Minister Fredrik Reinfeldt and Finance Minister Anders Borg in recent days.

Latvia's prime minister, who has been criticised for backtracking on promised budget cuts, said on Wednesday the country needed to balance the need for fiscal consolidation with economic growth.

The Latvian government on Wednesday also denied that a proposal to limit banks' claims on mortgages to the value of property is a step towards a currency devaluation. The proposal has been sharply criticised by the Swedish banking industry, which has heavy exposures in the troubled region.