In contrast to most advanced economies that typically denominate debt in domestic currency,emerging market economies denominate many debt contracts in foreign currency.

Question

Quizplus · Accepted Answer

This statement is true. Emerging market economies often denominate debt in foreign currency, which can make them vulnerable to exchange rate fluctuations and changes in global economic conditions. This can increase their risk of financial instability and default.

In Contrast to Most Advanced Economies That Typically Denominate Debt