Foreign or external debt represents the amount a country (both public and private sector) owe to other countries. Foreign debt can involve: Outstanding loans to foreign private banks (both principal and outstanding interest) Due payments to international organisations like the IMF Outstanding payments for a current account deficit, with country owing money for imports Debt …
There was a time when joining the Euro was a big issue, frequently debated in the UK. With Brexit referendum, it has become almost irrelevant. However, if leaving the EU proves disastrous and public opinions changes – rejoining the EU, may well involve signing up to the Euro – as new members may not get …
Apologies for lower posting volume recently. I am writing a book, which will be published some time in 2017. Also, in the past week I have been in New York, which has been a harsh lesson in the impact of a falling value of the Pound. Though fortunately, I earn some money in US dollars …
A trade weighted index is used to measure the effective value of an exchange rate against a basket of currencies. The importance of other currencies depends on the percentage of trade done with that country. For example in calculating the trade weighted index of the Pound Sterling, the most important exchange rate would be with …
In 2015, the German current account surplus surged to 8.5% of GDP. A record level and a surplus which has implications for the Eurozone and global economy. Source: Bundesbank The surplus is primarily due to the surplus on trade in goods. Though in recent years, there has also been a surplus in primary income. This …
Readers question: How much will the Pound devalue? Since the start of 2016, the Pound has been depreciating against other currencies – especially the US dollar. Since Brexit end of June, the Pound has fallen another 10% heading to a 30 year low against the US dollar. Pound Sterling against the Dollar This is daily …
The EU has many achievements of which it can rightly claim. Long period of peace and prosperity, unrivalled in European history. Secured transition to democracy for countries such as Spain and post-Communist countries in Eastern Europe Free trade and free movement has helped improve economic growth and living standards. Working on European wide problems, such …
A devaluation (depreciation) occurs when the exchange rate falls in value. This causes exports to be cheaper and imports to be more expensive. In theory, it can help increase economic growth, though it may cause inflation. In theory, a devaluation will cause the following to happen: The price of UK exports will be lower in …