How might liability dollarization worsen the financial marke

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Reference no: EM131167606

In some emerging market economies, not only are debt obligations to foreigners denominated in dollars, but so are many of the economies' internal debts, that is, debts of one domestic resident to another.

This phenomenon is sometimes called liability dollarization. How might liability dollarization worsen the financial market disruption caused by a sharp depreciation of the domestic currency against the dollar?

Reference no: EM131167606

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