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Latin America

naaman fletcher

(7,362 posts)

1. Let's hope Paraguay can manage the associated currency risk with doing this.

Reply to Judi Lynn (Original post)

Fri Dec 28, 2012, 07:33 PM

Dec 2012

Unlike, say Argentina.

When you borrow in Dollars you have to pay back in dollars.

That works well for Venezuela who sells it's oil in dollars.

If you don't have a dollar income, you have to convert your pesos to dollars first, and then pay back the bondholders.

If your inflation is higher than US inflation between the time you borrow the money and the time you pay it back, then you are paying back more in pesos than you thought they would.

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Highlight:

Paraguay to Emulate Bolivia With First Dollar Bond Sale [View all] Judi Lynn Dec 2012 OP

Let's hope Paraguay can manage the associated currency risk with doing this. naaman fletcher Dec 2012 #1

Perhaps Paraguay's confidence in issuing $ bonds instead of guarani bonds Lucky Luciano Dec 2012 #2