Costs and benefits of government borrowing in foreign currency: is it a major source of risk for EU member states outside the Euro?
https://doi.org/10.3326/pse.45.1.2 | Published online: March 9, 2021 Figure 1
Impact of a currency depreciation on the public finances Note: The simulation is performed assuming that the initial debt-to-GDP ratio is 50%, the primary deficit is zero, the share of foreign currency debt in total government debt equals 70%, the nominal GDP growth rate is 4%, while the weighted nominal interest rate on debt, initially set at 4%, increases following the depreciation of the currency to 5% in t+1, and further to 6% in t+2, remaining stable thereafter. Source: Author. Figure 2
Borrowing from the Eurosystem as percent of banks' total liabilities Figure 3
Government foreign currency borrowing and reserve accumulation in Croatia Source: CNB; author’s calculation. Figure 4
Composition of central bank assets, end-2018 (in %) Figure 5
Currency composition of government debt, 2018 (in %) Figure 6
Exposure of public finances to currency risk, 2018, in % of GDP Figure 7
Foreign currency deposits with commercial banks, 2018, in % Figure 8
Foreign currency liabilities and gross international reserves, 2018, in percent of GDP Figure 9
External fundamentals of CEE countries, 2007 and 2018, in percent of GDP Figure 10
Fiscal indicators of CEE countries, 2007-2018, in percent of GDP Figure 11
Geographical composition of merchandise trade of selected countries, 2018 This is an Open Access article distributed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC-BY-NC) which permits non commercial use and redistribution, as long as you give appropriate credit, provide a link to the license, and indicate if changes were made.
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March, 2021 I/2021 |
