strategy

Converting foreign debt into local currencies

Context:
The conversion of existing loans into local currencies is a variety of swap. It too can be a vehicle for repatriating flight capital, as well as alleviating the drain on foreign currency resources. The most serious drawback is that since domestic interest rates in the debtor countries are usually high, increased debt-servicing costs may exacerbate domestic fiscal problems.
Subjects:
Foreign
Local
Currency
Credit
Manufacturing processes
Type Classification:
E: Emanations of other strategies