Buybacks of LDC Debt and the Scope for Forgiveness
This paper explains why a debtor country may be eager to spend foreign exchange reserves on the retirement of its cross-border obligations at market prices. A simple two-period framework shows that such spending can be profitable to both the debtor countries and their foreign creditors, and thereby provides an explanation as to why the so-called buybacks of LDC debt actually take place. An extended version of the basic framework shows how buybacks can be induced by having commercial creditors grant debt forgiveness, and why debt forgiveness thereby becomes an optimal strategy for creditors to follow ...
|Date of creation:||01 Jul 1991|
|Contact details of provider:|| Postal: 2 rue Andre Pascal, 75775 Paris Cedex 16|
Phone: 33-(0)-1-45 24 82 00
Fax: 33-(0)-1-45 24 85 00
Web page: http://www.oecd.org/Dev
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:oec:devaaa:39-en. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.