RIGA — About half of Latvian businesses and consumers might soon be climbing an even steeper hill in loan repayments after the EURIBOR interest rates rose.

Many Latvians chose to take out their loans in euros when they first were given credit because of its lower interest rate and seemingly higher stability. Now they are having to pay their loans back at the same rate despite the country’s internal devaluation via wage cuts over the last year.

Those who opted for a floating interest rate on a euro-denominated loan will likely pay more for their loans as banks pass on the rise in interest rates to their consumers.

SEB Bank has predicted that the interest rates for businesses and consumers could rise by about 5-6 percent this year. They expect the trend to continue and warn against variable-rate loans over the near future.

EURIBOR, the Euro Interbank Offered Rate, is based on the average interest rates at which a panel of more than 50 European banks borrow funds from one another.

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