Ghana at the Verge of Default on Bonds

bloomberg.com

17 pointsniyikiza7 comments

Sri Lanka, now Ghana. The US Dollar is going to be a wreaking ball across a bunch of economies.

How does the US dollar cause this? Genuinely asking, I don’t know.

It’s the common denomination of international debt. To pay their debt, countries need to buy dollars… which are expensive right now.

On the other hand, their currency being weaker, their exports are more competitive. Hard to have it both ways ...

Pakistan is next.

Italy anyone?

Probably not - as part of the Euro system, there is more demand for their currency relative to the dollar.