Quick Economics Question
For some reason, I think panic of the exam has set in and the simplest things are starting to not make sense - please could someone help in understanding the following statement:
“Most emerging market debt is denominated in a non-domestic currency, which increases its default risk.”
I understand that EM debt has more default risk, but I thought the point of denominating it in a non-dom currency was to reduce its riskiness (so for example, the EM country doesn’t have the power to inflate its currency to reduce the value of the debt).
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.