The concept of 'Original Sin' in international finance refers to:
A. The original accumulation of capital
B. The sin of high fiscal deficits
C. The inability of many emerging-market countries to borrow abroad in their own currency
D. Only the problem of domestic debt
Answer: Option C
Solution (By JKSSB Mock Tests)
Original sin describes the situation in which most countries cannot borrow abroad in their own currency, forcing them to denominate external debt in foreign currency and exposing them to currency mismatches.
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