Closing conditions

Author: | Published: 17 Oct 2018

Original sin

Two economists have used the biblical term in a new way unrelated to apples or snakes: to describe the inability of most countries to borrow abroad in their own currency, instead having to borrow in foreign currencies.

Turkey is the most recent example of this situation, as the country owes hundreds of millions in dollar-denominated debt, ultimately making it harder to repay it. Fluctuations in the exchange rate between the US dollar and the Turkish lira mean that the country is finding it increasing...