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> which I'm pretty sure is the best way to deal with inflation problems as a lender Why stop at 2 currencies? Why not specify the debt in a large number of cur
by bostonpete 12y ago
> which I'm pretty sure is the best way to deal with inflation problems as a lender
Why stop at 2 currencies? Why not specify the debt in a large number of currencies that take the value at whichever is ultimately worth more? Of course this sort of hedging is good for the lender but it would be horrible for the borrower. I guess if you were desperate for the loan (or he was giving a really favorable rate) it's probably worth it, but I've never heard of a lender trying to hedge exchange rates in this way. But then again maybe I'm unaware of some of the games people have to play with other currencies since I mostly only have to deal with the dollar.
- eru 12y agoYou could denote your loan in Singaporean Dollar. Their central bank pegs the SGD to a basket of currencies, effectively giving you a similar hedge.