Ghana has finally reached an agreement in principle with its Eurobond holders to restructure some $13.1 billion debt. The country in December 2022 announced a suspension of the payment of some of its external debt as it began steps to restructure its debts after it had reached out to the…
Countries usually borrow in their own currency. For instance, Ghana’s government borrows by issuing cedi-denominated bonds, treasury bills or notes. Eurobonds however are bonds denominated in a different currency. For Ghana those bonds have been issued in dollars. The first problem with Eurobonds is that the interest rate charged to…
Governments borrow. They constantly borrow and people constantly lend to them because governments are not households or businesses – they are expected to last in perpetuity. Because they always have people lending to them, governments issue new debt to settle old debt. Therefore it is important that government keeps the…
