Defaults Loom as Poor Countries Face an Economic
Storm
https://www.nytimes.com/2022/12/03/business/developing-countries-debt-defaults.html
Poor countries owe, by some calculations, as much as $200 billion to wealthy nations, multilateral development banks and private creditors. Rising interest rates have increased the value of the dollar, making it harder for foreign borrowers with debt denominated in U.S. currency to repay their loans.
https://www.nytimes.com/2022/12/03/business/developing-countries-debt-defaults.html
Poor countries owe, by some calculations, as much as $200 billion to wealthy nations, multilateral development banks and private creditors. Rising interest rates have increased the value of the dollar, making it harder for foreign borrowers with debt denominated in U.S. currency to repay their loans.
Emerging Markets Face Risk of Policy Error Amid
Conflicting Priorities
https://finance.yahoo.com/news/emerging-markets-face-risk-policy-170000517.html
Related:
https://www.bloomberg.com/news/articles/2022-12-04/emerging-markets-risk-policy-error-trying-to-fight-both-inflation-and-recession
Emerging markets have witnessed an investor exodus this year despite having raised interest rates at an unprecedented pace. Local sovereign bonds plunged by the most since at least 2009, and currencies faced the worst annual losses since the Russian default of 1998. While a rebound since October has mitigated that slump, smaller economies are just one misstep away from a full-blown currency crisis. Any further selloff may shut off their access to capital markets, and push them into a cost-of-living crisis or even an economic collapse like that of Sri Lanka...
https://finance.yahoo.com/news/emerging-markets-face-risk-policy-170000517.html
Related:
https://www.bloomberg.com/news/articles/2022-12-04/emerging-markets-risk-policy-error-trying-to-fight-both-inflation-and-recession
Emerging markets have witnessed an investor exodus this year despite having raised interest rates at an unprecedented pace. Local sovereign bonds plunged by the most since at least 2009, and currencies faced the worst annual losses since the Russian default of 1998. While a rebound since October has mitigated that slump, smaller economies are just one misstep away from a full-blown currency crisis. Any further selloff may shut off their access to capital markets, and push them into a cost-of-living crisis or even an economic collapse like that of Sri Lanka...
Poor Countries Feel Sting of Local-Currency Debt
https://www.wsj.com/articles/poor-countries-feel-sting-of-local-currency-debt-11670106942
Domestic debt is legally easier to restructure than foreign-currency bonds that are typically governed by U.K. or U.S. law, said Mitu Gulati, a professor at the University of Virginia School of Law. But often domestic banks and pensions own large chunks of government debt and would suffer if the value of those investments were sharply written down.
Sri Lanka and Zambia have pledged not to restructure local-currency debt, but investors and ratings companies are skeptical that they will be able to keep those promises.
https://www.wsj.com/articles/poor-countries-feel-sting-of-local-currency-debt-11670106942
Domestic debt is legally easier to restructure than foreign-currency bonds that are typically governed by U.K. or U.S. law, said Mitu Gulati, a professor at the University of Virginia School of Law. But often domestic banks and pensions own large chunks of government debt and would suffer if the value of those investments were sharply written down.
Sri Lanka and Zambia have pledged not to restructure local-currency debt, but investors and ratings companies are skeptical that they will be able to keep those promises.
Related:
Geopolitical Rivalries Are Transforming the
Contours of Trade
https://www.bloomberg.com/news/articles/2022-12-04/globalization-isn-t-dead-it-s-changing-shape
https://www.bloomberg.com/news/articles/2022-12-04/globalization-isn-t-dead-it-s-changing-shape