Emerging market Treasury bills

Many emerging market^[24] economies are now able to issue Treasury bills in their own currencies, while some others concentrate issuance in one of the major currencies of the world, especially the US dollar. By borrowing in the US dollar or another international currency the lenders can borrow at lower interest rates because international lenders are less fearful of a decline in the local cur­rency, but the downside is that when the country has to redeem the T-bills, it faces the risk that the dollar has risen against the local currency and so more local currency than initially thought needs to be paid out to lenders. This prob­lem has caused financial crises in a number of countries over the years, e.g. Mexico in 1995, Russia in 1998 and Brazil in 1999.