Who2 wrote: ↑
Wed Aug 12, 2020 12:40 am
Well I think the UK is borrowing a few-bob at present as well...
An interesting point my dear Dr, but when dealing with a strong currency, such as the £ sterling, at the moment, any international loan paid in U.S. $ can work out very cheap these days with inflation in the U.K. so low and the £ being stronger than the $, the real interest rate would work out as almost nil.
When we look at Egypt, most recent new loan were agreed through Madame Christine Lagarde, who up until recently was head of the International Monetary Fund. The various loans agreed over the past three years have become disasters. The Egyptian finance minister has to show how new revenue raised will be sufficient to pay back said loans with interest. As I have shown in my previous post this has failed.
All international loans are paid out in U.S. $'s and paid back in the same, and certainly not in LE's. Therefore present inflation in Egypt is back at 7%, though rural will be much higher. By the end of the year it will be 10% urban, so there is a clear additional EXTRA interest on the loans to add to the initial agreed interest rate, plus perhaps even a further devaluation of LE, and that will certainly throw the baby out of the pram, though loans will always be available for armed cars.
As I have written before on here, dear Madame Lagarde is no friend of the poor, even she has realised you can only push the poor so far,.........I hope she has learnt her lesson, though I fear not. Madame Chistine Lagarde is now President of the European Central Bank ( in other words the Deutsche Bundesbank) l am beginning to feel very sorry for the southern states of Italy, Spain, the whole of Greece and a few other nations in the EU.