On Structuring the Currency Composition of External Debt Portfolios

Artikel

The paper develops criteria for the optimal currency composition of external debt for emerging and developing economies. The underlying theory is based on a portfolio model taking into account fluctuations of exchange rates and of export prices. In the ordinary portfolio approach, a country would expose itself deliberately to foreign exchange risk which might be manageeable in a situation of stable export prices. If export prices are subject to substantial fluctuations, the debt structure needs to be adjusted to the export structure. the empirical analysis for Korea shows that the dominant role of the USD as a major currency for foreign currency loans is inappropriate. Choosing a currency composition that would have been closer to the export structure would have been superior in terms of a strategy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Asian Economies ; ISSN: 0304-260X ; Year: 1986 ; Issue: 59 ; Pages: 17-44 ; Seoul, Korea: Research Institute of Asian Economies

Classification and Topics

• Classification: Wirtschaft ; Forecasts of Budgets, Deficits, and Debt ; Macroeconomic Aspects of International Trade and Finance: Forecasting and Simulation: Models and Applications ; National Debt; Debt Management; Sovereign Debt
• Subject: Portfolio management of foreign debt ; Managing of Balance-of-payments risks

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Amelung, Torsten ; Mehltretter, Thorsten ; Solte, Reinhard
• Event: Veröffentlichung
• (who): Research Institute of Asian Economies ; ZBW - Leibniz Information Centre for Economics
• (where): Seoul, Korea
• (when): 1986

Further information

• Handle: http://hdl.handle.net/10419/235507
• Last update: 10.03.2025, 11:42 AM CET