Faculty / School
Faculty of Business Administration (FBA)
Was this content written or created while at IBA?
No
Document Type
Article
Source Publication
Finance & Development
Keywords
Crisis, Bank, Developing countries, Debt
Disciplines
Finance and Financial Management | International Economics
Abstract
The goal of the debt strategy is often described as facilitating the return of debtor countries to normal and voluntary access to the international capital markets. Indeed, with this in mind, creditors interpreted the situation, in the immediate aftermath of the 1982 debt crisis, as one of temporary illiquidity. Debt restructuring agreements with both private and official lenders, therefore, essentially focused on adjusting debt service to help countries cope with higher interest rates and worsened terms of trade. Under these circumstances, the debtors that pursued strong adjustment policies had little choice but to restrain imports and raise exports. In the process, they generated trade balance surpluses, which enabled them to meet their debt-servicing obligations.
Recommended Citation
Fischer, S., & Husain, I. (1990). Managing the debt crisis in the 1990s. Finance & Development, 24-27. Retrieved from https://ir.iba.edu.pk/faculty-research-articles/242
Publication Status
Published
