EBRD Cautions On Currency Debt |
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November 2, 2009
Central and eastern Europe must get rid of its “addiction to foreign currency debt” by improving macroeconomic management, building local currency markets and tightening regulation, says the European Bank for Reconstruction and Development in a hard-hitting report published on Monday.
Central and eastern Europe must get rid of its “addiction to foreign currency debt” by improving macroeconomic management, building local currency markets and tightening regulation, says the European Bank for Reconstruction and Development in a hard-hitting report published on Monday.
In a review of the impact of the global financial crisis, the bank says international financial integration was generally good for central and eastern Europe (CEE) by bringing in credit and capital, principally from western Europe.
But financial integration brought “significant costs” by “encouraging credit booms and over-borrowing, and possibly in biasing the denomination of borrowing towards foreign currency”.
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