The Africa Report - Tuesday, 21 October 2014
The International Monetary Fund (IMF) has warned African countries
against rushing to issue Eurobonds, saying they may face exchange rate
risks and problems repaying debts.
African governments facing falling levels of foreign aid are on a
borrowing spree to pay for new roads, power stations and other
infrastructure, prompting concern from many analysts that this could
raise debt levels and undermine growth.
"It comes with some risks," the director of the IMF's African Department, Antoinette Sayeh, told Reuters in an interview on Monday.
"Whereas what it costs the countries to issue these bonds can often
look lower than what they would pay on domestic borrowing ... the real
cost in the final analysis will also depend on the evolution of exchange
rates in the course of the life of the bond issuance."
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