Defusing Debt - Creating Comprehensive Solutions

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Defusing Debt - Creating Comprehensive Solutions

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J Carvajal

Usually less developped countries have a higher proportion of hard currency debt, making them vulnerable to volatility in the exchange rate of their currency, caused mainly by capital flight from their economies.On the other hand, during the present challenging times, it can certainly be anticipated that developping nations will see the amount of their debt considerably increase, as their look to shore up their finances and close up financing gaps. In the context of this dilemma, what are the World Bank's plan to stimulate local currency lending to these emerging economies?
Mon, 10/12/2020 - 11:06
Alexander

Increasing debt transparency is high on the list to address debt distress. Debt transparency can be easily increased by promoting local currency solutions and taking away FX Risk. What is being doing to promote this?
Mon, 10/12/2020 - 11:08
Anne Fishman

Question addressed to Mr David Malpass. Dear Mr Malpass, You have raised the alarm bell on numerous occasions since the start of the Covid crisis on the increasing debt burden faced by many countries worldwide, calling for an increase in debt transparency. An important factor that explained the increase in debt levels of countries in Africa in particular relates to resource backed loans. Most of the time there is very little transparency in these arrangements and they only come to light once a country is in a situation of debt distress. What can be done to improve transparency and also ensure the participation of this type of creditors, the commodity traders, in debt relief?
Mon, 10/12/2020 - 11:09
Theo

To defuse debt, the share of USD debt on sovereigns' balance sheets should be reduced. The Covid19 crisis shows again how volatile frontier currencies can be. Lending in local currency increases risk transparency by showing the implied risks that are hidden in low USD rates! Why is this not yet on the agenda?
Mon, 10/12/2020 - 11:11
Tracy

Debt, of whatever form puts a country and it's citizens to economic distress and most especially, the poor and deprived are those who suffer . Hence there is the need to bring this menace to restitution. If a country must borrow, then for wise realistic developmental reasons and not for selfish reasons...which also drives down corruption. This puts the country on a life wire.
Mon, 10/12/2020 - 11:11

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