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Tue 20 Jan, 2015 03:22 pm
Hello! if you could please provide some insight on these questions:
(1) When international monetary players(e.g US) bail out other countries(e.g. Ghana), do they pay it in their own currency(US dollar), or the currency of the borrower (Ghana). Or do both options occur?
Also how can a country that borrows in foreign currency get to the needed currency to repay the loan?
They have to pay back with hard cash so I am assuming they (1) cannot pay it back with their own currency (2)nor create the money to repay the loan)
Is the answer that (3) "have to compete for it in the international market" or that the(4) "only option is to continuously reschedule the loan?
Thank you.
@Sarahlovesapples,
I think the currency exchange market gets involved.