A rescue loan is not a loan used to build infrastructure. They’re used to cover for existing debt, not to take on new debt.
The interest rate of loans is dependent on the international market. A loan with an interest rate of 5% is charity because China could get that exact same return from the US (which is much more stable, etc. etc.)
A 5% interest rate loan isn’t predatory in this economic environment. It’s a fucking donation. Ever heard of risk-adjusted returns?
A risk-adjusted return is a calculation of the profit or potential profit from an investment that takes into account the degree of risk that must be accepted in order to achieve it. The risk is measured in comparison to that of a virtually risk-free investment—usually U.S. Treasuries.
We were talking about this. I said IMF loans are cheaper than china loans. And you proved me correct so the next best thing was nitpicking my comments?
Who cares if a loan directly or indirectly benefits a nation.
Go grab some tea, revisit your nonsense and write a proper reply. Im not going to do the same thing as last time in which you refused to read the article everyone except you was discussing.
African countries aren’t taking IMF loans to fund this project lol. That’s the misunderstanding I think you have. They would be taking World Bank loans.
A rescue loan is not a loan used to build infrastructure. They’re used to cover for existing debt, not to take on new debt.
The interest rate of loans is dependent on the international market. A loan with an interest rate of 5% is charity because China could get that exact same return from the US (which is much more stable, etc. etc.)
A 5% interest rate loan isn’t predatory in this economic environment. It’s a fucking donation. Ever heard of risk-adjusted returns?
[citation needed]
Here’s some reading for you:
https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker
https://www.adamsstreetpartners.com/insights/covid19-rescue-finance/#:~:text=Rescue Finance Overview,credit and pureplay distressed credit.
Rescue loans are used to service existing debt. That’s literally the entire point.
https://www.investopedia.com/terms/r/riskadjustedreturn.asp
These are BASIC concepts. Come on, man.
https://lemmy.ml/comment/1508218
We were talking about this. I said IMF loans are cheaper than china loans. And you proved me correct so the next best thing was nitpicking my comments? Who cares if a loan directly or indirectly benefits a nation.
Go grab some tea, revisit your nonsense and write a proper reply. Im not going to do the same thing as last time in which you refused to read the article everyone except you was discussing.
African countries aren’t taking IMF loans to fund this project lol. That’s the misunderstanding I think you have. They would be taking World Bank loans.