Over the past two decades, emerging market economies have improved their external liability structures by increasing the share of debt denominated in local currencies, while foreign currency debt is considered a major source of financial instability. This paper embeds the debt denomination...

Over the past two decades, emerging market economies have improved their liability structures by increasing the share of their debt denominated in local currency. This paper embeds the debt denomination choice in a sudden stop model and explores how this alternative structure sheds new...