Emerging Economies Set to Struggle to Meet Debt Obligations

As the coronavirus crisis deepens in emerging economies around the world, collapsing currencies, commodity prices, export earnings and tourism revenues threaten to shred the finances of many governments, leaving them scrambling to avoid default, the Financial Times reported. Zambia has already called in advisers to restructure its debt while Ecuador has asked for more time to make coupon payments on three dollar bonds. Few analysts believe they will be the last. Tunisia, Bahrain and Angola are among the other emerging and frontier countries that some economists fear will struggle to meet impending payments on their cross-border debt in the coming months. The plunge in most emerging market currencies against the dollar has sharply increased the cost of servicing hard-currency debts, creating a serious threat to financially weaker states. Read more